Sen. John Kennedy (R-La.) Leads Letter to SEC Chairman, FDIC Chairman and SIPC President About Robinhood Financial Misleading Customers
Dec 20 2018
WASHINGTON, D.C. – Sen. John Kennedy (R-La.) sent the following letter to SEC Chairman Jay Clayton, FDIC Chairman Jelena McWilliams and SIPC President Stephen Harbeck expressing his concerns about a financial services company, Robinhood, misleading its customers by marketing investment accounts as checking and savings accounts. Sens. Jack Reed (D-R.I.), Robert Menendez (D-N.J.), Mark Warner (D-Va.), Brain Schatz (D-Hawaii), Jerry Moran (R-Kan.) and Doug Jones (R-Ala.) joined Sen. Kennedy in sending this letter.
December 20, 2018
Dear Chairman Clayton, Chairman McWilliams and Mr. Harbeck:
We write today regarding the recent news that Robinhood plans to open checking and savings accounts now under the guise of “cash management.” Financial technology (fintech) firms like Robinhood serve a vital purpose and increase consumer choice, inclusion, and economic prosperity. Competition with traditional servicers like banks and credit unions can ultimately benefit consumers, but we must continue to maintain the integrity of our financial system as the digital revolution expands.
As you’re aware, on December 13th, Robinhood announced the availability of new checking and savings accounts with a three percent interest rate. Under a now deleted announcement, Robinhood wrote, “your cash in Robinhood is insured up to $250,000 by the Securities Investor Protection Corporation (SIPC). SIPC protects cash deposits in your account in the unlikely event that Robinhood fails.” We commend SIPC for quickly and publicly explaining these accounts would not be insured. Robinhood subsequently retracted its claims and rebranded the new service as “cash management.”
Cash management is an important existing service offered by brokers to address investor demand to better manage their money. We are concerned that rebranding Robinhood’s original announcement to cash management may simply be a way to circumvent regulatory scrutiny without offering full transparency to its customers. As of December 20, over 850,000 people have signed up for the waitlist for Robinhood’s new service, and some of these individuals may have signed up before Robinhood retracted its SIPC insurance claim and because they thought they would be getting “Robinhood Checking and Savings.” Marketing an investment account as a traditional checking or savings account can be misleading and confusing for consumers.
We applaud innovation that reduces barriers to consumer friendly financial products and challenges competitors to improve their business models. This is why Congress will continue to explore options that both encourage innovation, while protecting consumers and the safety and soundness of our financial system. In the meantime, we would appreciate an update on how the SEC, FDIC, and SIPC carefully monitor fintechs who, intentionally or not, blur financial products for competitive advantage. Indeed, robust competition should not come at the expense of customer clarity, and every effort should be made not to mislead customers. We thank you for your consideration and would appreciate a response by January 31, 2019.
John Kennedy Jack Reed
United States Senator United States Senator
Robert Menendez Mark Warner
United States Senator United States Senator
Brian Schatz Jerry Moran
United States Senator United States Senator
United States Senator
Dec 20 2018
WASHINGTON, D.C. – The U.S. House of Representatives passed the Veterans Small Business Enhancement Act today that was introduced by U.S. Senators John Kennedy (R-LA), Tammy Duckworth (D-IL) and Dick Durbin (D-IL) to help veteran entrepreneurs cut costs and enhance their economic opportunity by giving them access to surplus federal property. This legislation now heads to the President’s desk to be signed.
The federal surplus property program allows certain non-government organizations to acquire equipment and property that the federal government no longer needs. This legislation adds veterans to the program’s list of eligible recipients, which already includes minority-owned and women-owned small businesses. The Veterans of Foreign Wars (VFW), the National Association of State Agencies for Surplus Property (NASASP) and the American Legion support this legislation.
“All veterans deserve our utmost respect and support after they return home,” said Sen. Kennedy. “Adjusting back to civilian life can be challenging, and as policy makers, we should try to make the transition as seamless and painless as possible. As Americans, we should support and encourage those veterans who decide to start their own small businesses. This legislation will offer veteran entrepreneurs some well-deserved support. The federal surplus property program is already established, so it’s just common sense that we should allow veterans to qualify for the program. I’m happy to see this legislation pass in both chambers and make it to the President’s desk.”
“When our Veterans return home from their service, they deserve our full support as they transition back into civilian life, and that includes supporting their efforts to build and manage a small business,” said Duckworth. “Our nation should be doing much more to help our Veterans and I’m pleased the Senate unanimously passed our bipartisan bill to help Veterans expand their business operations, reduce costs, and create jobs across Illinois and around the country. I’m thrilled we were able to work with members on both sides of the aisle to send this legislation to the President’s desk.”
“Last month we honored the sacrifices of our nation’s veterans, and part of that commemoration is committing to help America’s warriors when they return from battle and transition to civilian life. Countless veterans are entrepreneurs and small business owners making contributions to their communities, but many struggle with the costs of starting a new business idea,” said Durbin. “With passage of the Veterans Small Business Enhancement Act, veterans can now use GAO’s federal property surplus program, which can help veterans save costs as they open new businesses and store fronts. This is a commonsense and bipartisan bill, and I was proud to join Senators Duckworth and Kennedy to help pass it in the Senate.”
Sen. Kennedy (R-La.) Announces Final Passage of Justice Against Corruption on K Street Act (JACK Act)
Dec 20 2018
WASHINGTON, D.C. – U.S. Sen. John Kennedy (R-La.) today announced the final passage of bipartisan legislation that will require lobbyists to disclose convictions of bribery, extortion, embezzlement, illegal kickbacks, tax evasion and money laundering. Both the House and the Senate have now voted in favor of S.2896.
S.2896, the Justice Against Corruption on K Street Act, is known as the JACK Act for lobbyist Jack Abramoff, who was convicted of tax fraud and bribery. Abramoff did not have to disclose his criminal history on his registration when he re-registered as a federal lobbyist in 2017.
“The JACK Act will provide much-needed transparency to Capitol Hill. Corrupt lobbyists need to be brought into the sunlight, especially if they’re wearing $6,000 suits,” said Sen. Kennedy. “Political leaders and businesses need to know who’s sitting in front of them. Transparency is the best way to clean up the corruption in Washington. Even cockroaches are scared of sunlight.”
Dec 20 2018
Sen. Kennedy: ‘Congress missed a prime opportunity to fully fund a border wall’
WASHINGTON, D.C. – U.S. Sen. John Kennedy (R-La.), a member of the Senate Appropriations Committee, voted Wednesday to pass a continuing resolution that funds the federal government and reauthorizes the National Flood Insurance Program (NFIP) through Feb. 8, 2019.
“Congress missed a prime opportunity to strengthen our border security and fully fund a border wall,” said Sen. Kennedy. “Border walls work. The liberal Democrats in Congress know that, which is why they won’t support it. Most of them don’t believe illegal immigration is illegal, and they want open borders. The much-needed border wall funding should have been tied to the ‘criminal justice’ bill that the Democrats so desperately wanted. I am disappointed, but I take solace in the fact that we were able to avoid a lapse in the National Flood Insurance Program. Five million families depend on the NFIP, and we need to agree on a long-term reform. For now, I will keep fighting to fund the program in order to protect Louisiana families.”
WASHINGTON, D.C. – U.S. Sen. John Kennedy (R-La.) today announced the final passage of legislation that he and U.S. Sen. Doug Jones (D-Ala.) introduced to remove unnecessary compliance costs hampering the ability to create jobs and encourage economic development in rural communities. S.2765, RBIC Advisers Relief Act of 2018, now has cleared the House and the Senate.
“We have to ensure the long-term stability of our rural businesses and entrepreneurs. To create jobs and bolster Louisiana’s economy, they need access to capital,” said Sen. Kennedy. “There were a number of unintended consequences to Dodd-Frank. One of those consequences was the creation of unnecessary compliance costs for investment advisers working to create opportunities in rural communities. Our bill fixes that.”
“It is a top priority to ensure that the entrepreneurs and businesses in our rural communities have a fair shot at success,” said Sen. Jones. “This bill is evidence that we can find bipartisan solutions to help promote economic growth in rural America. This is common sense legislation that helps put rural business on an equal playing field and help them access the capital they need to succeed.”
RBICs are licensed under the Rural Business Investment Program (RBIP), a venture capital program created as a joint initiative between the U.S. Department of Agriculture and the Small Business Administration. The RBIP was designed to promote economic development and job creation in rural communities by investing in companies involved in the production, processing and supply of food and agriculture-related products.
An unintended consequence of Dodd-Frank forced investment advisors to register with the Securities and Exchange Commission if they advised both an RBIC and a venture capital fund. Congress already fixed this burden for Small Business Investment Companies (SBICs) in 2015. This bill offers the same crucial relief to RBICs.
Dec 17 2018
WASHINGTON, D.C. – U.S. Sen. John Kennedy (R-La.) announced today that the Louisiana Department of Health (LDH) today is putting the planks of his reforms into place by using federal income tax data for the verification of Medicaid recipients’ eligibility. Sen. Kennedy is hopeful that the data will prevent the state from wasting millions more dollars on ineligible Medicaid recipients.
Sen. Kennedy filed the Income Verification Act of 2018 in November to reduce fraud in taxpayer-funded government assistance programs by requiring states to use federal tax information to verify income eligibility. A report issued earlier this year by the Louisiana Legislative Auditor’s Office found that the state likely wasted up to $85 million on ineligible Medicaid recipients. A new report released today uncovered even more waste because of LDH’s failure to verify household size, taxpayer filer status and all types of income.
“The waste of taxpayer money in the Medicaid program is breathtaking,” said Sen. Kennedy. “LDH should have been checking Medicaid eligibility from day one instead of just throwing millions of dollars in the dirt, but I’m glad someone’s finally seen the light. I congratulate LDH on taking a cue from my bill and using readily available information to make sure even more money isn’t wasted. Sometimes you have to legislate common sense.”
Dec 17 2018
WASHINGTON, D.C. – U.S. Sen. John Kennedy (R-La.) announced today that the City of Baker School System received a $5 million grant from FEMA for improvements at Baker High School. The school was damaged by flooding in 2016.
“While our teachers and students are the heart of our schools, they need the right buildings and resources to teach and learn,” said Sen. Kennedy. “It’s been more than two years since Baker High School was flooded. These repairs and improvements to the school are long overdue.”
Sens. John Kennedy (R-La.) and Tom Cotton (R-Ark.) Introduce Amendment to Criminal Justice Reform Bill
Dec 14 2018
WASHINGTON, D.C. – U.S Sens. John Kennedy (R-La.) and Tom Cotton (R-Ark.) introduced an amendment Thursday to the First Step Act. The amendment addresses gaping loopholes in the legislation that currently allow violent criminals and sex-offenders to qualify for early release programs. This amendment prioritizes the rights of the victims by requiring prison wardens to notify victims before an offender’s early release. It also includes a measure to track the effectiveness of anti-recidivism programs.
The National Association of Assistant U.S. Attorneys, the National Association of Police Organizations, the Federal Law Enforcement Officers Association, and several organizations dedicated to victims’ rights offered their support for this amendment.
“The First Step Act is a violation of American public safety, but this amendment addresses some of the major shortfalls in the legislation,” said Sen. Kennedy. “This is not a criminal justice bill. It is a prisoner release bill. We should be protecting victims of crimes and not the offenders who committed the crimes. I don’t think the bill represents justice, but I think our amendment will fix some of the issues with the legislation.”
"I'm pleased that major law enforcement groups support our amendments to exclude violent felons and sex offenders from early release, notify victims before criminals are released, and to measure whether the First Step Act works,” said Sen. Cotton. “Next week, the Senate will vote on these amendments. I urge my colleagues to support these changes to ensure that no violent sex offenders can be eligible for any type of early release.”
WASHINGTON – U.S. Sen. John Kennedy (R-La.) spoke on the Senate floor this week about the devastating impact of Gov. John Bel Edwards’ so-called criminal justice reform program on crime victims and, in particular, one Louisiana family.
“I am so sorry that a family lost a child to the reckless actions of a drunk driver. I’m even more sorry that the drunk driver served a minimal amount of time in prison because of Gov. Edwards’ criminal release program. This is just one example of how this program is failing families across Louisiana, and it should serve as a warning,” said Sen. Kennedy.
Gary Prince, of Loreauville, wrote to Sen. Kennedy about his devastation after his son’s killer was released early from prison through Gov. Edwards’ program. Prince’s son, Jordan, was just 18 years old when King Ellis, whose blood alcohol level was double the legal limit, drove the wrong way on Highway 90 near New Iberia and crashed into Jordan’s car. The head-on collision killed Jordan, who had just graduated from high school.
Ellis served just 18 months of his 15-year prison sentence. He received an early release despite being arrested on Medicaid fraud charges while in prison.
Here is an excerpt of Mr. Prince’s letter to Sen. Kennedy:
“My son was a good kid! He had a bright future! He wanted to follow in my footsteps and become a machinist … My family deserves better than this. I want you to know that when I say my prayers at night, I pray for a better Louisiana.”
Letter from Gary Prince to Senator Kennedy
Dear Senator Kennedy,
My name is Gary Prince and my youngest son Jordan was killed by a drunk driver in May of 2015. He was only 18 years old and had just graduated high school 12 days before this accident. The man that killed him was driving the wrong way on Highway 90 near New Iberia and crashed into my son head on. His blood alcohol level was .16 which is twice the State's legal limit. He was sent to jail on March 23, 2017 with a sentence of 15 years which 8 years was suspended. Because of John Bel Edward's Justice Reinvestment Initiative, this person that killed my son was released on September 11th of this year. He served only 18 months in jail! This blows my mind!
Because the blood alcohol level was not high enough (below .20) his offense was considered a non-violent offense which made him eligible for early release. There is a state law (RS 14:32.1) which states that anyone convicted of DUI w/vehicular homicide with a blood alcohol level of .15 or greater has to spend a minimum of 5 years with or without hard labor without the benefit of early release or early parole.
This was not taken into account for this criminal!
I just wanted to tell you that I listened to you on The Moon Griffon Show yesterday and I feel the same way you do. I am terrified of the direction that my State is heading in! I do love Louisiana, but we need change and we need it fast!
My son was a good kid! He had a bright future! He wanted to follow in my footsteps and become a machinist! I've worked hard all my life in the oil business and I pay my taxes! I feel that my family deserves better than this! I want you to know that when I say my prayers at night, I pray for a better Louisiana. A Louisiana that is governed by someone that cares about its’ people and steers it towards a brighter tomorrow and not by someone who opens up terrible wounds and horrible memories like the ones my family has all because of dumb decisions!
I really hope that you consider running for Governor in 2019! We need this craziness in Baton Rouge to end!
Thanks for Listening!
With Warmest Regards,
Gary L. Prince