Speaker 1:
From the Library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision in global business, the dream drivers that have made the NYSE an indispensable institution for global growth for more than 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSE and ICE's 12 exchanges and seven clearing houses around the world. Now here's your host, Josh King, head of communications at Intercontinental Exchange.
Josh King:
Little Rock, Arkansas. Ah, the memories come flooding back. November 3rd, 1992. Governor Bill Clinton elected the 42nd president of the United States. There I am, one of his partisans, on the lawn of the old state house on Markham Street, where it intersects with Center Street. On the loud speakers, Aaron Copeland's Fanfare for the Common Man. Then there's September 26th, 1997. The 40th anniversary of the Little Rock Nine, when once Central High School barred these African-American students, now the president holds the door open for them. It was a sight to behold. Also a sight to behold, the big names that propelled Arkansas forward. Walmart, NYSE ticker symbol, WMT. It's market cap in 1992 when I spent most of my time in Little Rock, about 60 billion. It's market cap today 254 billion, enough said.
Josh King:
I went back to Little Rock last year to gather with my old compadres, those who worked on the Clinton's 92 and 96 campaigns, stayed at the Capitol Hotel, still a jewel of the south. Yeah, some nerves were still raw from the election. Me, I just wanted, if there were moderates in the middle, on both sides who could try to get something done in Washington, like balance a budget, which President Clinton did back in the nineties, opposite the Republicans in Congress. Today here in the ICE House, I'm sitting with one of the current class of GOP members of the House who's closer to the middle than the extremes. And it's a pleasure to have Representative French Hill who represents the second congressional district of Arkansas encompassing Little Rock today at the New York Stock Exchange.
Josh King:
You see, the commodity, financial, bond, and credit markets are heavily regulated. So Intercontinental Exchange works closely with regulatory bodies and the governments of the countries where we operate. Since the US Capitol moved from our doorstep here in New York to that swampy area between Maryland and Virginia, representatives of the Exchange and the government have traveled up and down the coast to visit each other's place of work to improve and modernize the markets that Alexander Hamilton first envisioned. It's a trip made easier in the 1800s and early 1900s by the rail connection between the two using money raised right here on the floor of the NYSE.
Josh King:
Congressman Hill is one of the leading experts on the interchange of ideas that occur up here and in the northeast corridor to shape the country's financial system. Our conversation with him right after this.
Speaker 3:
Intercontinental Exchange is proud to be part of a network of companies that are dedicated to advancing the world through corporate social responsibility initiatives, Voya Financial, NYSE ticker VOYA, which just celebrated its fifth anniversary of listing is an example of a company doing things for its communities. More on Voya's social responsibility efforts later in the show.
Josh King:
Our guest today, French Hill, has represented Arkansas's second district in Congress since January 2015 and serves on the US House Committee on Financial Services, an ideal appointment considering his pre-Congress experience. Mr. Hill spent several decades working in finance and was the founder and CEO of Delta Trust and Banking Corporation. His early career was spent in government service with stints as the Deputy Assistant Secretary of the Treasury for Corporate Finance and Executive Secretary of the President's Economic Policy Council under the first Bush administration, president Bush 41, George H W Bush. Congressman Hill, welcome to the ICE House.
Congressman French Hill:
It's a pleasure. Thanks for the invite.
Josh King:
Did the Arkansas trail, when I was back in Little Rock, it had not been as popular a thing when I was there for the first time, but went up all the way up the river on the north side of town, it was an amazing experience. What's have happening in Little Rock?
Congressman French Hill:
Well, we're linking that bike trail now, not only in the metro area in Little Rock, but all the way to Hot Springs, Arkansas, by virtue of following the old Rock Island railroad route from Little Rock down to Hot Springs, so we're going to have more trails when you come back. But it's been extraordinary to watch it. One of the key components on closing the gap in that trail was the old Rock Island Railroad Bridge, right at the Clinton Presidential Library, which has really been a fantastic addition to the trail system.
Josh King:
The whole area of the river market district near the Clinton Presidential Center, totally transformed since those days, I was there in 1992. And you know, you wouldn't go down there late at night.
Congressman French Hill:
No, it was very controversial when President Clinton and the city father selected that site. It was a brownfield site. It was an old rail yard. The famous Rock Island building that was left there, the Choctaw Route had been a spaghetti warehouse in the days before through the 1980s and early 1990s. I would estimate that well over a billion dollars has now been invested in that area immediately to the Clinton Presidential Library. You've had Heifer International move their headquarters there. And now it's really an emerging dining and office establishment in what is now called the East Village. We've had several major relocations there, including our largest charter school has put their elementary and middle school campus, just a stones throw from the Presidential Library.
Josh King:
On the west side though, there's still Doe's Eat Place. Still a popular joint?
Congressman French Hill:
Doe's Eats is a popular spot and there are many pictures of you and your colleagues celebrating the work of 1992. And the food's still great.
Josh King:
I remember it well. So Congressman Hill, I think it's now, it's got to be 60 years since the opening of Little Rock Central High School. And I was reflecting on that moment 40 years later when I was there with President Clinton, when he opened the door for the Little Rock Nine.
President Bill Clinton:
What happened here changed the course of our country forever. Like Independence Hall, where we first embraced the idea that God created us all equal, like Gettysburg, where Americans fought and died over whether we would remain one nation moving closer to of the true meaning of equality. Like them. Little Rock is historic ground for surely. It was here at Central High that we took another giant step closer to the idea of America.
Josh King:
So much continues to happen to try and improve education in states like Arkansas. You've got a bill that has advanced this even further.
Congressman French Hill:
Well, I do. And it's interesting because President Clinton, as you know, worked to make Central High School a national historic site, and that was accomplished during his presidency. And then during 43's presidency, they were able to build a wonderful visitor center there at Central High. What I was able to do this year, working with my friend, John Lewis from Georgia is pass a bill virtually unanimously in the House. We also passed it on the unanimous consent calendar in the Senate to add the houses along South Park Street in front of the facade of Central High. We've added them to the National Park Boundary now. So a visitor on the Civil Rights Trail going forward will be able to picture that street back in 1957 and see those houses as they were in the years ahead. And I think it's a valuable change to the national site and I was proud to work with an iconic member of the Civil Rights movement, a great member of Congress and a good friend of mine, John Lewis, on that bill.
Josh King:
Have you been up to the New York Stock Exchange before?
Congressman French Hill:
I have. When I worked for the Senate Banking Committee early in my career, I worked for a Senator from Texas named John Tower.
Josh King:
John Tower.
Congressman French Hill:
And in that process, I came to the Exchange for a classic tour back in 1983, probably. And my friend Mill Batten was the chairman of the New York Stock Exchange then. He was retired and then an executive in the retailing industry. And I just remember, when I come back now that I have that perspective of a bustling, busy place with the two trading floors.
Josh King:
You just had an opportunity to speak with the current president of the New York Stock Exchange, Stacey Cunningham, in her job now maybe all of two months. Your contrast between those visits back to visit Mill Batten and the way Stacey and this Exchange operates today.
Congressman French Hill:
Well, obviously electronics, technology is the difference, but the unifier is that New York and the New York Stock Exchange is still the epicenter of not only capitalism, but a fair, equitable, and liquid market for people to transact their business with corporate America. It's still the iconic place it was in 1792, but the change now is no doubt it's technology.
Josh King:
What led you originally to Vanderbilt University?
Congressman French Hill:
Well, I went to a boy's high school in Little Rock, Little Rock Catholic High School, and my mother is deceased, but she was a Virginian and she wanted me very much to go to Washington and Lee University in Virginia. And I reminded that it was all men at that time, and that I was going to a co-ed university. And so Vanderbilt was high on my list. It was co-ed, it had high academic standards. And I'll never forget visiting in 1973 or 74 on Halloween night, and they had a pumpkin on the top of Cornelius Vanderbilt's head. And I thought, man, this is my kind of college campus. That's why I headed it to Vanderbilt. I loved it. It was a great experience.
Josh King:
Vandy and the Razorbacks both have great college baseball programs. They're not shy about making their way to Omaha for the College World Series. Are you conflicted when they're both vying for the College World Series title?
Congressman French Hill:
Definitely conflicted. And it was such a heartbreaker in the last few days to watch Arkansas struggle and they've worked so hard. They have such a great team. And so many of their talented players are now signing across professional baseball. So they'll be back. I have no doubt, they'll be back
Josh King:
After Vanderbilt for you, Congressman Hill, you worked at an NYSE company for three, and then as you said, worked for Senator Tower on the Senate Banking Committee. At that point in your career, were you more interested in politics working for Tower or economic policy?
Congressman French Hill:
You know, it was really economic policy. My goal when I was a teenager, I've worked, I guess, every spare moment I've had since I was about 13 years old and I've always wanted to be in business. So it was the chance to see economic policy put in place for somebody as respected as John Tower. I was working in Dallas, Texas for a New York Stock Exchange company then, First International Bank Shares, simple FIV, now part of Bank of America. And it was that chance to take what I'd learned in those three years of working in Texas and work at a higher level in the public policy arena.
Josh King:
And then in 1989, you were appointed at the Treasury Department, had a unique role at the end of the Cold War under President Bush assisting the former Soviet Bloc countries in central Europe, setting up their banking and capital market systems. Were you building them from the ground up or reforming what was existing there? Was it a complete buildup job?
Congressman French Hill:
Boy, it's a good question. So as the Berlin Wall came him down, my principal task was hiring US business people, US lawyers, US bankers, and embedding them at the finance ministries in Warsaw, Budapest, Prague, Sofia, Bulgaria, and all the aspects of the breaking up of Yugoslavia. But it was to have them help perform the rule of law. How do we design private property? How do we design the rule of law? How do we put in place a stock market rule, the law, the regulations? And we did all that in the central banks and in the finance ministries and also helped get the talent to put what is now the Warsaw Stock Exchange put in place.
Josh King:
At the White House, President Bush is on TV as the Berlin Wall is coming down, all the anchors are there.
Speaker 6:
From ABC, this is World News Tonight with Peter Jennings reporting tonight from Berlin.
Peter Jennings:
From the Berlin Wall, specifically, take a look at them. They've been there since last night. They are here in the thousands. They are here in the tens of thousands. Occasionally they shout [foreign language 00:13:17], the wall must go. Thousands and thousands of West Germans come to make the point that the wall has suddenly become irrelevant. Something, as you can see, almost a party on. How do you measure such an astonishing moment in history?
Josh King:
At Treasury, Secretary Brady must have been pulling together his best and brightest people like you and say, the wall's come down, the pictures are made, but now the hard work begins.
Congressman French Hill:
Well, it was a fascinating time because President Bush was constantly berated on both sides. He had to walk a delicate balance between Mikhail Gorbachev's Glasnost and Perestroika movement and Helmut Kohl and his position in Europe. Are we going to unify Germany or not? And it was a very fine line, and the United States was not going to put up all the financial resources for the rebuilding of these countries. And so we also had to collaborate with our partners in Europe. So we took very modest resources in the private sector and in the public sector, as I say, to provide these basic law changes. We also set up the Hungarian and the Polish American Enterprise Funds, which continue to this day that were a way to contribute equity capital into those two very promising markets, which, I think, we've now looked back on 25 years with just remarkable the success in Prague and Budapest and Warsaw since the Berlin Wall's collapse.
Josh King:
As President Trump heads across the Atlantic this week to the NATO Summit, Senator Kay Bailey Hutchinson, our ambassador to NATO is waiting there to greet him on the tarmac. Certainly a lot of tensions the last time he got together with NATO leaders. And just the example that you're talking about of what President Bush, Secretary Brady, you did all those many years ago, how does it feel about representing an administration that has pushed Europe harder for more investment in its own defense and perhaps scaling back the American commitment to growing democracy across Europe?
Congressman French Hill:
Well, I think there remains a strong partnership between Europe and the United States toward the Atlantic Partnership that's worked so well since World War II. I don't think anything going on in the Trump administration is changing that, in my view. I think what the president said is the 28 or so members of NATO made a commitment to boost their defense spending to X percent of GDP. Three countries or so have met that commitment. Others are moving toward it over the next 10 years, plus a certain amount of weapons upgrades. And I think you'll see that the leadership of NATO has actually thanked the President toward pushing member states to help pay more of their defense, particularly in light of Russian aggressionness. And I think that's something certainly Germany and Poland know a lot about. So in my view, I think that partnership is strong. I think President Trump has enhanced it actually by reinforcing NATO's own commitment that's been made over a number of years.
Josh King:
You moved from the Treasury Department in the early Bush years/ by 1991, you were at the White House. Your responsibilities were the Executive Secretary to the President's Economic Policy Council. How did moving from a cabinet department into the West Wing sort of change your focus of government service?
Congressman French Hill:
Well, it was a unique role. President Reagan had set up this Economic Policy Council, Domestic Policy Council system when he took office in 1981. And then as you well know, President Clinton really reformed the Economic Policy Council apparatus to a statutory basis, not unlike the National Security Council, but we worked in that vein during those years. And in it, I wore two hats. I was still a special assistant to Secretary Brady at the Treasury and a special assistant to President Bush 41. And you are a internal Henry Kissinger. You recall well the cabinet affairs responsibility in the White House. And so my main task was keeping the President's economic policy message in the regulatory agencies and coordinated with the legislative approach on track and keeping all the frogs in the barrel, as they say down in the south. In terms of we had, like all cabinets, internal cabinet squabbles, and President Bush had to referee between Jack Kemp, the HUD Secretary, Bob Mosbacher, the Commerce Secretary, Nick Brady, the Treasury Secretary, and then the one and only most machiavellian person in the cabinet at the time, Richard Darman, who was the OMB director. I had a very busy task every day.
Josh King:
And you, as the Southerner, had as a colleague a Yankee named Larry Kudlow, who now returns for another stint in government. How's he doing since his health scare a few weeks ago?
Congressman French Hill:
Well, Larry had a little repair work done in the bypass arena. I think he's doing great. He's glad to be back at work. We first met during the first Reagan term when he was OMB deputy director and chief economist. At that time we had a goal of trying to bring more private capital into mortgage finance. We had the temerity of suggesting that Fannie Mae and Freddie Mac should be privatized, and so we bonded over that experience back in the early 1980s. But it's good to have Larry's voice back in the West Wing, back in government. He is a consummate economic policy leader in this country and has been for over three decades, so I'm glad to have his voice back in Washington.
Josh King:
Following your work in the executive branch, and obviously the change in governments, it's time for you, French Hill, to come back to Arkansas to start your own business beginning your work at the Little Rock Bank, which is now part of Regions Financial, which is listed under the NYSE ticker symbol RF, and then you founded Delta Trust and Banking Corporation. What made you decide to launch your own community bank and why was Little Rock the right place for it?
Congressman French Hill:
Yeah, it's a quite great question. People need to live where they want to live, where they want to raise their for family. And I think you're always most successful in your life and your career if you live and prosper where you want to. What's important to you? What kind of environment do you want to be in? So Little Rock was home for me. And after my service in the Bush administration, I went home to Little Rock and had a great career at what was First Commercial Bank. It was listed on another organization and we sold to Regions in 1998. At that time, there was a lot of consolidation around the country of midsize banks into the large banks. There were record prices paid for banks. When Regions Financial bought First Commercial at the time in 1998, it was the highest price paid as a multiple of book value, 4.2 times book for our company.
Congressman French Hill:
So at that time I had a special interest in wealth management and trust administration and the whole trust business, and that had terribly consolidated in Arkansas and around the southwest. So the idea behind Delta Trust was to have a community bank charter, but have a specialty niche in investment banking and trust management and trust planning and estate work. And that's what we did. We headquartered in Little Rock, but we had accounts in all 50 states and we had customers investment and trust customers in over 30 different states.
Josh King:
Your time at Delta Trust coincided, Congressman, with one of the most transformative periods for finance in US history, as the financial markets became increasingly technology driven. That's a lot of what you're focusing on today at the New York Stock Exchange. Were you paying close attention to how policy makers were adopting to changes and how did they do?
Congressman French Hill:
Well, it was a transitional period. I mean, we went from, there were probably a hundred exchange traded funds in 1999 when I started Delta Trust. Now we have several thousand and that's an example of the change in the wealth management business and the impact on price discovery and what we do here at here at the Exchange. Likewise, we had new ways to communicate with customers and we had new threats, cybersecurity threat. We had a change in the AML BSA, a rule significantly, particularly after 9/11 and all that was coming to fruition. And I think all financial institutions, whether the brokerage industry, the exchanges, or the banks had to reassess their scale and how to make that investment to be able to cope with these global trends and technology change.
Josh King:
In the very seat that you're sitting, a few weeks ago we had another former White House aide turned private sector leader, David Rubenstein. He leaves the Carter administration. He recruits into Carlisle some members of the Bush administration to work for him. And he never looks back. You sound like you are going to live the dream, live the life in Little Rock, Arkansas, building a career in banking. And then you say, boy, it's time to get back to Washington. Why was that?
Congressman French Hill:
Well, I have always enjoyed public service. I've admired it since I was probably 10 or 11 years old when I volunteered and went to Rockefeller's campaign to reform Arkansas back in the late 1960s. And so this is my third tour in public service. I believe the value of it. I think it's very important for people to leave their home and hearth and serve in public life, whether it's on a school or a city council, or even to serve in Congress. I think that's an important obligation that we all have as citizens of our country. So at midlife, having achieved a principle objective of mine, since I was that teenager I told you about, I started my own business. I didn't hit the date that I'd promised myself, which was before age 40. I was 42 when I started Delta Trust.
Congressman French Hill:
But, I'd accomplished that goal. And with the support of my family, I decided to reenter public life. And it so happened that the congressional seat in Little Rock was an open seat and I decided to run for it and have really enjoyed the past three and a half years representing the people of central Arkansas. It's a humbling experience. It's certainly the most humbling job I believe I've ever had. It's the most different job I've ever had in my career, but I wouldn't trade it. It's really been a great way to intersect of my love of people, love of public service, love of public policy and history. It all comes to play when you serve in the people's house. And it's a humbling experience because I'm the 11th person since Arkansas became a state in 1836 to serve in the House, representing Little Rock.
Josh King:
I want to get into your campaign. And then your three and a half years in Congress, and where you see Congress today, right after a break.
Speaker 3:
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Josh King:
Welcome back. Before the break, Representative Hill and I were talking about his career trajectory leading up to his 2014 election to Congress. Before we dive into your campaign, Congressman, we took a look back at your Twitter page. You're not a frequent poster, but the two weeks were very active on one topic. We mentioned it earlier, the Arkansas Razorbacks College World Series run. Anything else sort of inspire you to go to social media to talk about what's happening on in the state and the local activities?
Congressman French Hill:
Well, I think social media is an essential way to communicate with all of our citizens. Twitter, particularly, is a lot of fun. It's a great way to share information and celebrate. In fact, one of the best things about it, I think, is the celebration, particularly in sports. I like to follow the Razorbacks and it's fun to watch all the comments flow during the game, so that's a big part of big part of it.
Josh King:
Your connection with your constituents is sort of immediate in this way, and I'm sure in your ability to get back to your district every weekend, you come face to face with people who put you in office. Compare sort of the way in which you are immediately accountable to people you represent to those days when you worked for Senator Tower in Texas. And we talking earlier off-air about a mutual friend of ours, Mack McLarty who sits and writes these long letters personally to everyone he's ever met five minutes after he meets them. But the immediacy of the way that you need to communicate now as a Congress person versus it was the way in Tower's time or Mack's time as Chief of Staff in the White House.
Congressman French Hill:
Well, it's certainly sped up. There are more ways to be in touch with people, social media has done that, but the fundamental issue is responsiveness. We try to answer our mail, the snail mail, and the email flow and keep all of our mail 80% of it answered within three weeks. And lately, in the last few months, we've been able to keep a hundred percent of our mail answered within a week, which is a real testament to the hardworking staff I have. Back in Tower's day, that was the same issue. You weren't on a computer doing it, but you had a IBM Selectric with the stored paragraphs in it. And you were using carbon paper, but the objective to promptly answer people's questions is the same and respond to their needs.
Congressman French Hill:
I think the challenge in social media is that a post is not necessarily contacting a member of Congress. And I think this is a challenge for private business too. If you're selling cereal or soap and I post on your Facebook page, have I contacted that company? Have I given them feedback? And I think this is a real challenge for communicating with consumers and with constituents. So we encourage people to reach us any way they want to by fax or by the website at hill.house.gov or by social media. But again, this unifying word, technology, has changed, but that contact with the citizens and their ability to reach out to touch their member of Congress or Senator is undenied.
Josh King:
That 2014 campaign, as you said, you were starting a third stint of government service, aspiring to move back to Washington. You strike a very unique kind of image on the campaign trail. I want to hear one of the ads that was made in support of your campaign.
Speaker 8:
My dad's been driving Old Blue since before I was born. He watches every penny.
Speaker 9:
It's embarrassing.
Speaker 8:
But that's why he'll be a good Congressman.
Josh King:
You still have Old Blue?
Congressman French Hill:
I do still have Old Blue. No one will ride in it with me because in the heat of the summer, the air conditioner is intermittent. So the family has completely rejected the car. And, for me, that's fine. It's very freeing to get in my hot un air conditioned car and go wherever I want to. And I don't have to have them with me.
Josh King:
They'll still see you driving around the second district in Old Blue on the weekend?
Congressman French Hill:
You will, on a regular basis. A lady stopped me in Kroger the other day. And she said, "Aren't you Congressman Hill?" And I said, "Yes, ma'am." She goes, "Yeah, I thought it was because I saw the car."
Josh King:
Yeah, I live up in, on the weekends on New York 19, the 19th congressional district. And I have a friend who'd love to run for that seat. I think if I ever ran for it, I would take my 1983 Jeep CJ7 with no air conditioning and do the same thing as you did.
Congressman French Hill:
It's a thing of beauty.
Josh King:
What were the key differentiators for you in that 2014 campaign? I mean, certainly your thriftiness, the way you sort of made sure you watched every buck going in and out of the family's bank account was sort of the meta theme, and the way you've run your businesses, but what did your victory really turn on in 14?
Congressman French Hill:
Well, I think it was experience and common sense and bringing a sense of solutions to the job and being accessible. I'd been a chamber chairman. I'd been president of the local Rotary club. I'd helped start a lot of businesses, both as an investor, as well as a commercial banker. So it was about caring about the community, but I really think the issue was business, common sense solutions, has a sense of economic policy experience that is needed in Washington. And I think that's what the campaign turned on. I'd run against a long time, good guy, a nice friend of mine, career politician who'd been a local mayor in that race. And so I believe sincerely that it was my business experience and my economic policy experience. And then my hard work at starting businesses and helping businesses that was the turning point.
Josh King:
The Arkansas Republican party has a lot of icons and you've met a lot of people along the way in business and in politics. Who was the sort of kitchen cabinet and the people you said, I really need your advice and help as I think about how I'm going to return to Washington?
Congressman French Hill:
Well, I think a good friend of mine, Larry Walter, was very important in the campaign. He'd been, back in his career, an executive at Southwestern Bell, now AT&T, a listed company on the New York Stock Exchange.
Josh King:
T.
Congressman French Hill:
And Larry had retired, and we had first met, he was a loaned executive under the Lyndon Johnson Loaned Executive Program at the US Treasury in 1990, is how we met each other. And he was instrumental in helping me create the ways and means to run that campaign and get the advice. And then I had tremendous support from my very able, gifted spouse of 30 years, who is a great lawyer and a great public policy person herself. She was the deputy legal advisor to Brent Scowcroft on the National Security Council back during Bush 41s years. And so I think Larry and Martha were a big help at helping me chart the course on how to set up that campaign. And there were many others I won't try to name them all you.
Josh King:
You get to Washington, you start watching CNBC, or we do, watching CNBC and you're in the rotunda on the air. And it looks like you've never left from your time in Bush 41, the way, the practical way in which you answer questions and take on the issues. I want to hear a little bit of one of your appearances and get your reflect on that on the other side.
Speaker 9:
That's right, joining us now, and an exclusive inner you Representative French Hill, a Republican from Arkansas, a member of the House Committee on Financial Services and founder and former CEO of a community bank. Representative Maxine Waters, let's begin here. She asked Yellen today about lessening the regulatory burden on community banks. So Congressman, I guess the question is, is there some sort of quid pro quo negotiation going on, less regulation of smallest banks in exchange for overall changes to Dodd Frank?
Congressman French Hill:
Well, let me say this by saying that every member of Congress, Democrat and Republican, has great community banks in their hometown. They're all hearing about the negative impact of Dodd Frank on their ability to serve customers at competitive prices.
Josh King:
Did it fit like an old glove when you're now have the camera on you and you're answering questions about your role on the committee versus your early days behind the scenes as a staffer?
Congressman French Hill:
It did. It's been comfortable to come back to topics that I love, which are economic policy, financial regulatory policy to try to use my experience of 35 years, both in the private sector and the public sector to craft solutions that are not political, they're just sensible. And I think that's what Washington needs. Washington's hungry for it. Members in the House on both sides, I think, look for that, whether we're talking about conservation and natural resources policy, or we're talking about financial regulatory policy. This splintering to the fringes of the two parties, which has happened over a long period of time, is destructive to finding that common ground and moving the country forward. A litmus test for everyone who votes in a legislative body should be, is the proposal before us, it's the best proposal that could be crafted? It's not the best, it's the best one that could be crafted. And among all the choices, does it improve current law and move the ball down the field towards a better economy, a better tax structure, a better natural resources structure, whatever the topic is? And if the answer is yes, then you should gather around that and move forward. And I think that's what the American people are looking for.
Josh King:
Are there members across the aisle on the House Committee on Financial Services, people that you enjoy working with? Are there a few that you think can really cobble a coalition together in the middle?
Congressman French Hill:
Oh, absolutely. This committee has got some real talent on it. Legal talent, financial talent, entrepreneurial talent. And I've enjoyed working with my friend, Bill Foster, from Illinois on a number of matters. He's a scientist. He brings that point of view to the Congress. We've had a number of bipartisan successes, and also my good friend from Colorado, Mr. Perlmutter, my good friend, Governor Carney from Delaware. When he was on the committee, he and I collaborated quite a bit. So, in DC to go narrow is to maintain that bipartisan focus. When you use the word comprehensive, or you try to get too much in one direction or not, you begin to have people on those fringes peel off, and that's the problem of trying to do too much sometimes. But you can reach consensus on a more narrow solution to a task, you ought to take it and move on and come back and fight again another day sometimes. And so we have passed, gosh, we've had over a hundred bills, more than that, maybe 150 bills signed into law by President Trump in this Congress alone, at least a third of those would be in the financial services committee, I'm sure. And they were all quite bipartisan.
Josh King:
If you could aspire to do two or three big things on that committee before the midterm elections, what would they be to get the next big things done?
Congressman French Hill:
Well, we have some obligations. We need to get a flood reform done. We have a flood insurance program in this country that goes back to-
Josh King:
NFIP.
Congressman French Hill:
NFIP, goes back to 1968. We don't have a earthquake program, but we have a federal flood program. And there's private alternatives to that program and it needs to be reformed for fiscal purposes. It's got nearly a $30 billion embedded deficit in that program. And so that's high on my list to do before the midterm is to get flood insurance reforms made and get that program reauthorized. And then we hope with the Senate to have a capital markets bill that we collaborate on between Chairman Hensarling and Chairman Crespo in the Senate that we hope to move before the midterm elections as well to boost capital formation and make it easier for entrepreneurs in this country to raise capital for their company, and ultimately have the greatest honor in the world, which is to list it on an internationally recognized exchange like the NYSE.
Josh King:
Topics, Congressman Hill, like lit exchanges versus dark pools or the Exchange Facility Bill, they don't necessarily translate into things that are top of mind as you approach a midterm election. But how do you explain to your constituents that complicated financial legislation will affect their day-to-day experience in Little Rock?
Congressman French Hill:
I think it's a big challenge in financial services to make that connection sometimes. One of the greatest members of the House in its history, John Paul Hammerschmidt of northwest Arkansas was elected back in 1964. He was a colleague of George HW Bush's when they were both elected the same year to the House. John Paul always said you need to have a things committee and a people committee. And for him, the people committee were veterans and the things committee, for him, was highways and transportation. So you have to take something complicated like financial regulatory policy, monetary policy, trade policy, and connect it back to the working people of this country. And to me, it's about capital formation, access to capital, the cost of that capital and the ease in which it flows to families trying to borrow the money for their first home or their first car or for that emerging business that wants to do what every entrepreneur wants to do, which is to grow that business and have a great financial success. So I think the best thing members can do is take these complicated issues, but connect them back immediately to that flow of capital and the cost of capital.
Josh King:
We're okay geeking out on some issues here inside the ICE House, so I know it's probably come up in your conversations with Stacey Cunningham and your visit here to the NYSE, but ICE, Intercontinental Exchange operates lit exchanges across all asset classes. But if we just look at equities, currently 60% of trades occur on a lit exchange like that other exchange, or the NYSE. While dark pools play an important part in the market, how do you think a trend toward more dark pools affects the market? Some of the people investing in their 401ks in Little Rock, sometimes they're not sure exactly where their stocks are traded.
Congressman French Hill:
Well, this gets into transparency and this gets in also to price discovery, and very importantly, that best execution obligation that all of us have that represent our customers, whether they're employee benefit plans like you're talking about, or an individual young person, who's putting $50 a month into an IRA account to start saving for their future kids and their future college. All that need to have confidence that that bid as spread is as narrow as possible and fully reflects the buyers and sellers of that public company. So we have to make sure that our laws, no matter who the players are, have that version of transparency and that people have confidence because that's a secret to all markets, all capital markets is confidence, that they're getting a price that's been best executed and that it fully reflects all the information available on that particular name.
Josh King:
Congressman French Hill, I hope maybe I can come down to Arkansas and see you an Old Blue riding around a little bit in you're bid for reelection. Best of luck on the campaign trail.
Congressman French Hill:
Come to Old Blue, come in the fall, it's cooler. The windows will be cracked and we'll go to Doe's and we'll have a great dinner.
Josh King:
Thanks so much for joining us in the ICE House.
Congressman French Hill:
Thanks for the invitation.
Josh King:
That's our conversation for this week. Our guest was Congressman French Hill from the second district of Arkansas. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or a question you'd like one of our experts to tackle on future show, email us at [email protected] or tweet at us at NYSE. Our show is produced by Pete Ash and Ian Wolff with production assistance from Ken Abel and Steven Port. I'm Josh King, your host, signing off from the Library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, expressed or implied, as to the accuracy or completeness of this information and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security or recommendation of any security or trading practice.
