The Charlotte Regional Business Alliance recently hosted a conversation on the future of banking and fintech with Rep. Patrick McHenry. McHenry began the conversation by sharing his view of this Congress and Speaker Kevin McCarthy.
“The Speaker has done a good job of bringing people together and being a collaborator,” he said.
McHenry is a close ally of McCarthy’s and had a front row seat to the Speaker’s election earlier this year. He noted that many people assumed there would be acrimony following the speaker election, but that republicans are working together on oversight, fiscal issues, and other topics.
On the debt ceiling, McHenry said there is a small group in the House working with the Speaker, but that progress has been slow with the White House. Notably, he said the Speaker is trying to avoid a government shutdown and to implement spending limits while there is a divided government in Washington.
“The Treasuries Market is dollar diplomacy,” he said. “We have the most trade in the globe and the most significant debt in the world, so our debt trades like it is dollars.”
Addressing the debt ceiling is critical to the continued leading position for the U.S. in the global economy. The debt ceiling will continue to be a key issue throughout the rest of the year.
In addition to the debt ceiling, lawmakers will address the federal budget, with a focus on defense and domestic discretionary spending. “We need an agreement on the longer-term fiscal house,” he said. “Medicare, Medicaid, Social Security are very important societal topics that we have to make sure are preserved and saved.”
He noted that the federal government is taking in record sums in tax revenue, spending record sums, and has a record deficit – a situation that must be addressed to have a more sustainable economy.
With the recent issues facing the banking industry, including the collapse of Silicon Valley Bank, McHenry will have a critical role in uncovering what happened and what next steps need to be taken to protect consumers and banks. McHenry serves as the chairman of the House Financial Services Committee and has already held a hearing on the situation.
“We need to know the facts and circumstances of the bank failures,” he said.
He went on to describe both management failures – regarding how bank executives misjudged interest rates and other economic pressures at the banks that failed – and supervisory failures – regarding how regulators misjudged the severity of the situation facing banks and perhaps did not act strongly or swiftly enough once the failures were apparent.
“There are some important questions we want to understand before we start legislating,” McHenry said regarding the investigation of the bank failures, including hearings before his committee.
On another topic of great interest for the Financial Services Committee, McHenry discussed his approach on cryptocurrency.
He was adamant that laws and regulations need to keep pace with technological changes in digital currency and society broadly. The framework of regulation should include a definition of a digital asset, treatment of digital assets, oversight of trading platforms, and a definition of stablecoin.
It is apparent that the committee and the market will have continued roles to play in the digital currency space.
Data privacy is another topic being addressed by the House Financial Services Committee.
“Our laws and regulations need to fit with the digital age and the requirements of the internet these days and the ways consumers interact,” McHenry said. “We have not updated the data privacy rules in this country since the late 1990’s.”
McHenry sees bipartisan buyin to updating data privacy in this Congress. McHenry is leading efforts on financing nuclear energy, having filed a bill on the topic. His concern is that the U.S. is not keeping up with nuclear energy capacity, whereas other countries are doing so. Adding nuclear capacity will also lead to carbon reductions globally.
Beyond the scope of his committee work, McHenry answered a question about supply chains.
“We need to ensure that we have resilient supply chains that are critical for our economy from minerals to pharmaceuticals and everything in between,” he said.
McHenry also talked about talent and workforce.
“If you look at the marketplace and the performance of North Carolina, we have the third highest movement of people into our state in the nation,” he said. “We have people that are voting with their feet and moving to our state.”
North Carolina is a low- tax state that invests in education and infrastructure, which has led to growth, he continued. Organizations like the Charlotte Regional Business Alliance recruiting businesses have made a huge difference, McHenry said.
McHenry will also work with colleagues to ensure there are a number of pathways for new educational opportunities, including degrees, certificates, and other skills.
McHenry covered a host of issues, some coming through his committee, others broader in scope. He will continue to play a critical role in the House, representing the Charlotte Region and North Carolina as a thoughtful voice on important issues.
McHenry concluded his remarks by saying, “My focus is on moving sound policy. We are wrestling with generational issues. Let’s stay focused on policy and the goals we’re trying to achieve in policy and that way we can better work together to achieve those outcomes we all think are so very vital for our state, our country, and the world.”
