On Tuesday, Congressman Patrick McHenry (R-N.C.), the House Financial Services Committee chairman who went viral with a gavel-banging incident when serving as temporary Speaker of the House in the wake of Kevin McCarthy’s ouster, announced that he would not seek reelection.
The Financial Services Committee has broad jurisdiction over the securities and banking industries, including oversight over the Securities and Exchange Commission. McHenry was an outspoken critic of the Commission’s Hard Close and Swing Pricing proposals, which critics, including the American Retirement Association (ARA), said would disrupt defined contribution plans, require a complete overhaul of intermediaries’ systems and processes, and tremendously increase participant costs.
“While the ARA focuses our comments on the adverse impact the 4:00 pm Hard Close will have on employee retirement plans, we share the skepticism of mutual fund sponsors as to whether swing pricing will provide meaningful benefits to fund shareholders in light of the various costs that will be borne by investors,” the American Retirement Association said in a letter to SEC Chairman Gary Gensler opposing the measures. “A better approach would be to require mutual funds to disclose the (ordinarily small) dilutive effect of redemptions on persisting shareholders and to direct investors to ETFs if they wish to avoid such dilution of their interests.
Additionally, under McHenry’s leadership, legislation allowing 403(b) plan advisors to offer collective investment trusts (CIT) passed out of the Committee.
McHenry also notably introduced the Protecting Retirement Savers and Everyday Investors Act in 2020, which would prohibit states from imposing a Financial Transaction Tax (FTT).
Thanking his “bosses” (constituents) in his western North Carolina district for allowing him to serve, he said the reelection decision did not come lightly, but he believes “there is a season for everything and—for me—this season has come to an end.”
“Past, present, and future, the House of Representatives is the center of our American republic,” he added. “Through good and bad, during the highest of days and the lowest, and from proud to infamous times, the House is the venue for our nation’s disagreements bound up in our hopes for a better tomorrow. It is a truly special place, and—as an American—my service here is undoubtedly my proudest. Since being sworn in on January 3rd, 2005, I have worked every day to uphold the Constitution and the system of government our founders so wisely created.
“I’m thankful for my staff—in DC and at home in NC—who have so ably served me during my time in the House. It has been an honor to work alongside you over the past two decades,” McHenry concluded. “They are gifted folks who have dedicated their careers to serving the people of western North Carolina and our nation.”
