Category: Blog

BGR Deep Dives: Breaking Down the Basel III Endgame Implementation

Posted on by Anna Sullivan

By Keaghan Ames, BGR Vice President, Financial Services Practice

Late last week, the banking regulators (Federal Reserve, FDIC, and OCC) issued the long-anticipated proposal that aims to implement changes from 2017 to international capital standards (the “Endgame Standard”) adopted by the Basel Committee on Banking Supervision (“Basel Committee”). However, the beltway is abuzz over the fact that the proposal goes far beyond the proposed changes from the Basel Committee and instead aims at fundamentally increasing the amount of capital large ($250 billion +) and medium-sized ($100-250 billion) banks are required to carry.

The most noticeable deviation from the proposed international Basel III changes entails the rollback of legislative and regulatory tailoring reform resulting from Congressional adoption of S.2155. By way of background, only six years ago Congress passed, with bipartisan support, S.2155, a law that would tailor banking regulation for firms based on various risk factors, not size alone. Last week’s proposal deviates from the resulting tiered framework using the recent bank failures of SVB and Signature, which were considered risk management and supervisory failures, as a justification for the regulators to treat any bank with over $100 billion in assets the same as the largest U.S. bank.

Many banks are individually assessing how the thousand plus page proposal will impact their operations. At a high level, the proposal will fundamentally modify the current capital regime by increasing the amount of capital all banks over $100 billion in assets must carry. The regulations are expected to increase common equity tier 1 (CET1), which is primarily common stock of banks, by 16%. To say this will be onerous for the top 40+ impacted banks would be an understatement. It also changes how affected bank holding companies will have to calculate their capital requirements, adding a new expanded risk-based calculation in addition to the existing standardized approach. Under this dual-stack requirement, banks will be required to hold the higher of the two-risk weighted asset amounts to satisfy their capital requirements. The proposal also adds a number of other significant regulatory burdens and changes including eliminating the use of internal models to assess credit and operational risks, requiring medium-sized banks to unnecessarily switch their calculation of counterparty risk of derivatives exposure, including derivatives when calculating the cross-jurisdictional activity risk factor, adding counter-cyclical capital buffers for banks that pose little macro-economic threats (e.g., not too-big-to-fail), and requiring all banking organizations with more than $100 billion in assets to reflect unrealized gains and losses on available-for-sale securities in regulatory capital.

The expansion of the capital proposal is not entirely unexpected, but is still unfortunate as it will ultimately increases costs for the American public and retail and commercial borrowers. Whenever banks are required to hold more capital, it affects their ability to lend that capital back out to small businesses and the investing public. As it is, the credit markets are already in a slightly tumultuous time given the commercial real estate challenges and high mortgage interest rates.

Given the bleak picture painted by the proposal, the industry needs to vigorously advocate for changes to the final rule. There are both regulatory and congressional advocacy paths available to deal with the proposal. On the regulatory front, there were significant dissenters in the Fed and the FDIC who highlighted some procedural and substantive concerns with the proposal including the overly broad scope. Fed Chairman Powell said in his statement on the proposal, “While there could be benefits of still higher capital, as always we must also consider the potential costs.” Suffice it to say the costs of the proposal are significant and banks would be wise to highlight these substantive issues and the absence of a cost-benefit analysis in the proposal with the regulators over the 120-day comment period.

On the Hill, there are members on both sides of the aisle who fought and voted for S.2155. These members will be motivated to protect established law over the proposed regulation. With election season just around the corner, the economy is sure to be a dominant political topic. The potential for an unnecessary squeeze on credit lending will be an important discussion in the months ahead.

Broadband Equity and BEAD Funding Insights

Posted on by Anna Sullivan

On June 28, 2023 BGR held a virtual briefing, “Closing the Digital Divide: Allocation of Broadband Equity, Access, and Deployment (BEAD) Program Funding to States” moderated by Ryan Palmer, Microsoft Airband Global Digital Equity Strategist, and hosted by Loren Monroe, head of BGR’s State and Local Practice.

Bank Failures: Insights and Implications

Posted on by Anna Sullivan

By Keaghan Ames, Vice President, Financial Services

Behind the drama of the debt ceiling, many policymakers and in Washington and the states have been keeping tabs on recent bank failures and what if any actions need to be taken. In recent weeks, both the House Financial Services Committee (HFSC) and Senate Banking Committee (SBC) each hosted two hearings focused largely on the failing of Silicon Valley Bank (SVB)and Signature Bank: (1) calling former executives from SVB and Signature to testify as to what happened at their respective failed institutions; and, (2) semi-annual testimony of the federal prudential supervisors (including the FRB, FDIC, and OCC) with the SBC also including NYDFS Superintendent Adrianne Harris California DFPI Commissioner Hewlett to discuss the failures as well.

Back in March, BGR cited that most of the Hill had retreated to their ideological corners and by and large many have remained there. In addition to calling for a rollback of the previous Administration’s tailoring reform under S.2155, progressive democrats are also citing concerns around too-big-too-fail, particularly with more acquisitions on the way akin to the JP Morgan acquisition of First Republic. Moderate Democrats and Republicans continue to be focused on supervisory deficiencies including the lack of supervisory action taken following ratings downgrades of the failed institutions over the last two years.  It should be noted that the GAO recently testified in front of the HFSC subcommittee on Oversight and Investigations regarding its report citing FRB and FDIC supervisory deficiencies.

Despite the continued attention on these failures from the Hill, it’s still unlikely any legislation comes about as a result of these banking failures. However, we expect increased attention by Republicans and moderate Democrats on oversight of the financial regulators. To that end, Senators Tom Tillis (R-NC) and Jon Tester (D-MT) called on President Biden to appoint an independent investigator to “hold both reckless bank executives and ineffective federal regulators accountable for their roles in the recent bank failures.” In their letter, they cite that the Federal Reserve’s review of SVB’s failure was insufficient (see more from BGR here).

From the regulators, however, there will likely be some action in the coming months. The Federal Reserve Bank (FRB) and FDIC have made it clear they plan on taking policy actions to remediate the fallout. The FRB has made clear they plan on raising capital requirements through the implementation of Basel III, which was set to happen prior to the bank failures. Additionally, FRB Vice Chair for Supervision Michael Barr continued to reiterate that the Fed will reassess the tailoring reform from S.2155, including potentially rolling back regulatory and supervisory relief for medium, small, and foreign banks. The FDIC has noticed a proposed special assessment on any bank over $50 billion in assets with uninsured deposits to offset the costs associated with these failures, the comment period for which is open. Finally, the FDIC has also outlined a number of insurance deposit reforms, which was acknowledged by HFSC Chairman Patrick McHenry (R-NC). Congressional action would be needed for any changes to deposit insurance.

BGR Deep Dives: Federal Reserve SVB Review

Posted on by Anna Sullivan

Recapping the Federal Reserve SVB Review: What Happened and What’s Next

By Keaghan Ames, Vice President, Financial Services Practice

The collapse of Silicon Valley Bank (“SVB”) in March was at a minimum correlated with a series of chain reactions, including the failing of several other banks. For many, uncertainty about the particular details around how SVB failed resulted in certain doubts about the resiliency of several regional banks, including First Republic’s, and their ability to hold deposits and navigate fixed income markets.

Seven weeks later, the Federal Reserve (“the Fed”) recently announced the results of their review on the failure of SVB (“the review”). Each of these findings brings with them vastly different implications for the market and the continued national attention on medium-sized/regional banks ($100 billion- $250 billion in assets). The Federal Reserve made four findings. While the first three findings are readily understood and anticipated, the fourth finding will be the topic of discussion in Washington in the weeks to come.

  1. Silicon Valley Bank’s board of directors and management failed to manage their risks.
  2. Supervisors did not fully appreciate the extent of the vulnerabilities as Silicon Valley Bank grew in size and complexity.
  3. When supervisors did identify vulnerabilities, they did not take sufficient steps to ensure that Silicon Valley Bank fixed those problems quickly enough.

SVB’s inability to manage interest rate risk and scale its risk management framework with the growth of the bank was widely known prior to the Fed’s review. However, some of the risk-metrics around SVB were startling, specifically three facts: (a) 94% of the deposits at SVB were uninsured comparative to 41% among its other large banking organization (LBO) peers; and, (b) SVB actively removed interest-rate hedges beginning in early 2022, as rates were being raised by the Federal Reserve and, (c) beginning in Q4 of 2021, the unrealized losses on SVB’s investment portfolio securities continued to grow in the billions of dollars.

On the regulatory and supervisory side, the Senate Banking Committee and House Financial Services Committee hearings in late March revealed that the Fed and FDIC were aware of a number of these risk management deficiencies, including a lack of interest rate risk management upon the part of SVB. The review also confirms that the regulators did not fully extend the growth of these risks (i.e., the same scaling issue that SVB’s management had). There were also several delays by the Fed, including seven-months to develop an enforcement action related to some of SVB’s deficiencies and failing to take any material supervisory actions following significant rating downgrades in the 2022 Capital, Asset Quality, Management, Earnings, Liquidity, and Sensitivity to Market Risk (CAMELS) and Large Financial Institution (LFI) ratings.

  1. The Board’s tailoring approach in response to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA)[1] and a shift in the stance of supervisory policy impeded effective supervision by reducing standards, increasing complexity, and promoting a less assertive supervisory approach.

FRB Vice Chair for Supervision Barr made clear in the recent congressional hearings, well in advance of the conclusion of the Federal Reserve’s review, that he anticipated significant regulatory and supervisory changes as a result of SVB’s failure. Though the first three findings confirm that the SVB management and Federal Reserve supervisory teams failed to act in a prudent and/or expedited fashion, the report still suggests that the tailoring reform, implemented under S.2155 (i.e., EGGRCPA), contributed to the collapse of SVB. Specifically, SVB “may have more proactively managed its liquidity and capital positions or maintained a different balance sheet composition” but for the reform from tailoring. (emphasis added)

Many within the beltway believe that the Federal Reserve will use this “may have” as a justification to take actionable regulatory reform for regional and foreign banks. As far as anticipated reactions, industry and congressional policymakers will have a difficult time reconciling the notion that the deficiencies with SVB’s risk management and with the Federal Reserve’s supervisory teams should lead to further regulatory and supervisory reform for the entire banking sector. Particularly when that reform could lead to another one-size-fits-all regulatory approach that will ultimately squeeze medium sized banks and hinder competition in the banking sector.

Next Steps

Prior to the collapse of SVB, the regulators were already rumored to be increasing capital requirements on banks through the U.S. implementation of Basel III, a global overhaul of bank capital standards. The review seems to indicate that the Federal Reserve will finalize the Basel III reform and conduct a series of other reforms including rolling back the tailoring reform under S.2155 (EGRRCPA).

Congressionally, there will likely be more hearings. We anticipate Chair McHenry (R-NC) of the House Financial Services Committee, his top lieutenants, and several members of Congress on a bi-partisan basis will be hard pressed to support rolling back the tailoring reform, particularly in the current economic environment. Traditionally, the Fed’s Vice Chair for Supervision has testified before the Senate Banking Committee and House Financial Services Committee in May so it’s quite possible that the Hill will have an opportunity to speak with Vice Chair Barr in the near future.

[1] The Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) is also known by its bill number: S.2155.

Disagreeing Without Hate

Posted on by Anna Sullivan

By Loren Monroe

The language surrounding our political discourse is getting increasingly toxic every day. Looking at Twitter or listening to speeches by politicians offers a disturbing window into the angry national mood.

  1. The Democrat party has shown its true Communist colors.
  2. The House GOP leadership has enabled white nationalism, white supremacy, and antisemitism.
  3. Democrats Are the Ultimate Grooming Gang.
  4. DeSantis is now officially a synonym for ‘fascist.’
  5. The Biden family is a family that has become wealthy by enabling, helping, aiding, and abetting the Chinese.
  6. What Elon Musk did, removing blue checks, is no different than what the Nazi party did to journalists.
  7. We need a national divorce. We need to separate by red states and blue states.

There is no chance we would let our children speak to others with such vitriol. Yet it has become commonplace in our political discourse to launch brutal insults. Many people are unwilling to call out inappropriate language because they fear potential retribution.

The essence of our woes, according to Harvard professor and author Arthur Brooks, is a “culture of contempt.” Increasingly, voters are being told that friends, family, neighbors, and co-workers who vote for the other party or disagree with specific policies should now be considered detestable, unpatriotic, and downright dangerous.

A 2022 CBS News/YouGov survey found that 51 percent of Democrats feel Republicans are not simply political rivals but genuine enemies who pose a real threat to their way of life. Fifty percent of self-identifying Republicans who are conservatives selected “enemy” to describe Democrats, and 50% went with simply “political opposition.”

The polarization along political and social fault lines presents unpredictable challenges for business leaders. Companies must navigate the gaps in policy directions between red states and blue states, where there is increasingly hardened division among governing officials, customers, and employees. Deciding to take a position, or even to stay neutral, is almost guaranteed to result in a backlash from those who disagree on nearly any issue, whether on abortion, gun control, transgender rights, education, vaccinations, immigration, ESG, or public safety.

When one side declares an issue as an “existential threat,” it often proves impossible to have a thoughtful dialogue about the potential solutions. Increasingly, both sides are taking “the ends justify the means” approach to governing, resulting in debate being shut down in pursuit of outright victory.

Twenty-nine states have legislatures featuring a “supermajority,” and 39 state governments feature a “trifecta” – where one party controls the governor’s office and both chambers of the state legislature. One-party control leads to minimal debate on policy differences and expedited passage of legislation.

Leadership is required to build consensus and lower the temperature of our national discourse. Importantly, intergovernmental groups like the National Council of State Legislatures (NCSL), the National Governors Association (NGA), and the Attorney General Alliance (AGA) are designed to convene bipartisan gatherings where elected officials from different parties can work in cooperation to share ideas, build relationships find policy consensus.

Utah Governor Spencer Cox, the next chair of the National Governors Association, plans to focus his chairman’s initiative on “disagreeing better.” Commenting on the divide between red and blue states, Governor Cox recently tweeted, “We don’t need a divorce, we need marriage counseling. And we need elected leaders that don’t profit by tearing us apart. We can disagree without hate. Healthy conflict was critical to our nation’s founding and survival.”

Governor Cox intends to highlight how leaders get things done while engaging in healthy conflict. His first effort will be around immigration and the bipartisan agreement among governors about the need to grow the workforce. By working together to produce legislative proposals, Governor Cox aims to give bipartisan cover to Congress to finally act. As part of his initiative, Governor Cox will encourage members of different political parties to tape Public Service Announcements and write op-eds about the critical importance of working together to address challenges. The template will be the television advertisement that Governor Cox and his Democratic opponent taped during the 2020 campaign for governor.

Breaking down partisan impulses will require more than elected officials simply changing their tone. Arguably, politicians are responding to demands from voters to clearly state where they stand and how far they will go to defeat the opposition. The longer-term solution relies on building an environment that promotes civil discourse and encourages compromise.

Braver Angels is a 501(c)(3) nonprofit organization working to unite red and blue Americans in a working alliance to depolarize America, “Our work is about building civic trust in the USA. It is about healing the wounds between the left and right. We welcome opportunities to engage with those with whom we disagree. We look for common ground where it exists, and if possible, find ways to work together.”

A critical piece of the solution will be educating our nation’s future leaders on working toward consensus and not seeing compromise as a failure. As the founding Partner of BGR Group and former Mississippi Governor Haley Barbour tells students and clients alike: “Purity in politics is the enemy of victory.”  Governor Barbour often quotes his mentor, President Ronald Reagan, “The person who agrees with you 80 percent of the time is a friend and an ally – not a 20 percent traitor.”

Braver Angels, the American Council of Trustees and Alumni (ACTA), and BridgeUSA have developed a program to teach students from colleges and universities to respect ideological diversity, foster civil discourse on college campuses, and cultivate student and faculty leaders. They prepare students to express their views, frame persuasive arguments, listen deeply, and engage respectfully with each other around issues that are typically difficult and divisive.

Another admirable group working to foster civil discourse is the Civility Leadership Institute (CLI) based in Little Rock, Arkansas. Started by General Wesley Clark, CLI convenes diverse groups of leaders nationwide for a year of training, learning, and workshops. Participants tackle complex topics impacting the nation with the goal of achieving common ground and reducing partisan division and gridlock.

America’s most successful political leaders have always shared a key ingredient—an optimistic vision for our country’s future. The well-being of our nation relies on each of us listening to those we disagree with and heeding the advice of President John F. Kennedy, who often reminded Americans that civility is not a sign of weakness: “Let us not emphasize all on which we differ but all we have in common. Let us consider not what we fear separately but what we share together.”

Texas Legislature Update

Posted on by Anna Sullivan

By Jerry Strickland

The grind of the 88th Texas Legislative Session is reaching maximum churn as the biennial session moves closer to the finish line. With a month left to finish considering the 8,400+ pieces of legislation filed, the House and Senate both face quick deadlines to move legislation out of their respective bodies in the next two weeks, or those bills will officially be dead. It’s about this time of the Texas session when things become clear about what will move and what won’t.

What has moved? To put it plainly, the budget and most of the Texas Senate priority bills. What hasn’t? Two of the key pieces of legislation state leaders have talked about for years — property tax relief and school vouchers. More on that in a minute.

Just last week, conferees were selected to hammer out budget details between the House and the Senate version of the $308 billion budget. Those conferees will find agreement on some of the disparities between the House and Senate budgets, which both include a modest increase in spending, paid for by the $31 billion budget surplus state leaders have at their disposal.

While a good amount of focus has been on wedge issues like bills to address trans athletes, drag queen shows, and child gender reassignment surgeries, the Texas Legislature is moving through bills responding to the Texas power grid, Uvalde shooting, border security, healthcare, and economic development. Regarding economic development and Texas continuing to strengthen its already robust growth, businesses are closely watching the debate over House Bill 5. The Legislation is a priority for Speaker Dade Phelan and the Governor. It seeks to give Texas a replacement Economic Development program after the so-called Chapter 313 program was not authorized following the last legislative session. The program incentivized 600 business development projects in Texas by lowering school district taxes for those projects. After being discontinued in 2022, the program is being considered again, with some changes to who can qualify for the tax breaks. It’s something to watch in the waning days of this session as Texas tries to keep hold as the top state for business relocations and expansions.

Now back to those two big issues that haven’t moved as quickly as state leaders would like — property tax reform and school vouchers. The logjam is thanks to a vocal disagreement over which path to take on property tax reform. Lt. Governor Dan Patrick declared last week that the House approach is fundamentally wrong. You don’t have to look far to see how dug-in the Senate is, as they haven’t even referred the House-passed plan to a committee. Conversely, the House hasn’t been moving with lightning speed with the Senate-passed plan either. That impasse, plus the disagreement on school vouchers (a priority for both the Governor and Lt. Governor), has some folks whispering about a special session after the 88th gavels out. The Governor holds the ultimate power on whether to call legislators back, and he sets the agenda. Still, without these two items, chances are higher that summer plans may be stymied if no agreement can be reached.

BGR Deep Dives: Debt Limit State of Play

Posted on by Anna Sullivan

In a BGR Deep Dive, BGR Financial Services and Commerce and Infrastructure Vice President Steven Pfrang examines the latest on the debt ceiling debate.

Read More

 

BGR Deep Dives: Congress Stalls, States Move

Posted on by Anna Sullivan

In a BGR Deep Dive, BGR State and Local Advocacy Principal William Crozer examines the recent movement in state legislatures across the country.

Read More

 

 

 

Key Takeaways from House TikTok Hearing

Posted on by Anna Sullivan

By Alex Bedwell

March 24, 2023

The House Energy and Commerce Committee held a hearing focused on TikTok this week. The company’s CEO Shuo Chew testified and received difficult questions from members on both sides of the aisle. Here are some key takeaways from the hearing.

Will TikTok Be Banned?

During the hearing on Thursday, members of the committee expressed their firm belief that TikTok could be exploited by the Chinese Communist Party, leaving the future of the app in the U.S. uncertain. The Biden administration had already threatened a national ban, and the U.S. government had banned TikTok on government devices. The committee’s conviction was reinforced by a Wall Street Journal report, released just hours before the hearing, which stated that the Chinese government would not approve a TikTok sale. Lawmakers outside the committee are also not convinced, but a national ban would face significant legal and public opinion challenges. Previous attempts to ban TikTok were blocked in court due to free speech concerns, and millions of its users in the U.S. are unlikely to want to give up the fast-growing and popular apps.

Doubts regarding the feasibility of ‘Project Texas’

To address concerns about Chinese influence, TikTok has announced a new plan called Project Texas, which involves moving all data from U.S. users to servers located within the U.S. As part of the plan, the tech company Oracle would have access to TikTok’s source code and act as a third-party monitor. TikTok aims to complete the project by the end of the year, but some lawmakers doubt this is possible due to the large amount of source code that needs to be reviewed. Congressman Jay Obernolte (R-CA), who is also a software engineer, expressed concern that Project Texas may not have the technical capability to provide the necessary assurances.

China’s Relationship with TikTok

At the hearing, lawmakers repeatedly questioned Chew about China’s alleged influence over TikTok, citing it as a potential national security concern. Both House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Ranking Member Frank Pallone (D-NJ) referred to TikTok’s parent company, ByteDance, as a “Beijing communist-based parent company.” Chew maintained that the Chinese government does not control ByteDance and that there is no evidence that the government has accessed or requested access to U.S. user data. He also stated that TikTok does not remove or promote content at the request of the Chinese government. However, some legislators pointed out that Chinese engineers may still have access to some U.S. data due to the company’s reliance on “global interoperability.” Despite these concerns, Chew denied that TikTok posed a national security threat, stating that many of the risks are theoretical and hypothetical.

Content Moderation

Lawmakers also addressed broader social media concerns during the hearing, focusing on TikTok’s ability to moderate harmful messaging, misinformation, and inappropriate content. Several legislators presented TikTok videos that promoted self-harm or suicide. Chew said that TikTok employs 40,000 moderators to monitor harmful content and utilizes an algorithm to identify controversial material. Additionally, the company plans to have “third-party validators” assess its algorithms and grant researchers access to study and monitor the content. However, Chew acknowledged that TikTok is not perfect in its moderation efforts, stating that the company works hard to improve its methods.

Kids’ Safety and Mental Health

Another frequent focus of the hearing was the safety of TikTok’s younger users, considering the app has exploded in popularity with this age group in recent years. According to the Pew Research Center, most teenagers in the United States use TikTok. Specifically, 67% of individuals aged 13 to 17 have used the app, and 16% of that age group use it “almost constantly.” Lawmakers cited reports that drug-related content has spread on the app, allowing teens to purchase dangerous substances easily online. Chew said such content violates TikTok policy and that they are removed when identified. Others cited self-harm and eating disorder content, which have been spreading on the platform. TikTok is also facing lawsuits over deadly “challenges” that have gone viral on the app.

President Biden’s Veto of Anti-ESG Resolution

Posted on by Anna Sullivan

By Christian Dopico

WASHINGTON, March 20 – President Joe Biden issued his first veto on Monday on legislation that would have reversed the Department of Labor’s rule on fiduciary duties involving environmental, social, and governance (ESG) factors in investment decisions. Biden, in a message to the House of Representatives, says “there is extensive evidence showing that environmental, social, and governance factors can have a material impact on markets, industries, and businesses.”

The legislation, H.J. Res. 30, would have overturned the rule through the Congressional Review Act (CRA), which gives Congress the power to repeal a final rule issued by a federal agency within 60 days of its going into effect. The rule itself, titled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” clarifies that retirement plan managers can incorporate climate and social considerations into their investment decisions by considering participants’ preferences. The rule undoes a previous President Trump-era rule that let investment managers consider purely financial factors in their decision-making process.

The bill passed the House 216 – 204 with all Republicans present voting yes and all Democrats present voting no, except for moderate Rep. Jared Golden (D-ME), whose district voted for President Trump both in 2016 and 2020. The bill then narrowly passed the Senate 50 – 46 with Senators Joe Manchin (D-WV) and Jon Tester (D-MT) voting for the bill (and Manchin strongly criticized the President’s veto). Issues concerning ESG have been top of mind for Republicans, with this resolution being one of their first major efforts against the concept at the federal level.

House Republicans have plans to hold a vote on Thursday to override the veto. The effort will most likely fail, however, as a congressional override of a presidential veto requires a 2/3 majority of both houses of Congress. As such, Republicans would need 68 House Democrats to join in on the measure.

 

Resources:

Trump-Era Rule Limiting ESG Investing

Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights

Joint Resolution Undoing the Rule

President’s Message to the House Vetoing the Bill