WASHINGTON — Rep. Randy Hultgren, R-Ill., a member of the U.S. House Financial Services Committee, is “making municipal finance a priority” and is holding a roundtable on municipal finance and the municipal bond market Thursday at the University of Illinois at Chicago, an aide said.
Also on Thursday and Friday, the Federal Reserve Bank of Chicago will hold a conference in Detroit on “What’s After Bankruptcy? Lessons in Governance Reform and Financial Planning from Other Cities.”
In his roundtable, Hultgren wants to “bring together a cross-section of market participants, including issuers and investors, in order to talk about issues and challenges and look for ways to strengthen this lifeline to local communities,” the aide said.
A former vice president of Chicago-based Performance Trust Investment Advisors and aide to then-Rep. Dennis Hastert, R-Ill., Hultgren has taken an increasing interest in the muni market and state and local governments.
He circulated a letter earlier this year, along with Rep. Dutch Ruppersberger, D-Md., urging House colleagues to support preserving the tax-exempt status of municipal bonds.
Then in September, during a committee hearing on money market funds, Hultgren told members he was concerned the Securities and Exchange Commission’s proposal for funds to move to a floating, rather than fixed, rate net asset value, would deter state and local governments from investing in them for cash management purposes.
Hultgren said in a recent notice to market participants that the roundtable is “informational” and designed “to provide lawmakers with a concise discussion of the marketplace and the important role that municipal bonds play in the success of growing businesses and making our communities more competitive.”
He said he plans to share a transcript of the roundtable with colleagues with an eye toward helping to educate them.
Hultgren has an extensive list of discussion questions for three panels on: issuers; retail investors; and the muni market’s status and the future.
On the issuer panel, he wants to know why the muni tax exemption is important and who benefits from it, as well as how regulatory changes would affect demand for munis and how the SEC’s MMF reforms would affect the market.
He also will ask whether retail investors are using improved disclosures.
On the retail investors panel, he is asking a series of questions about pricing and liquidity, including how institutional investors find and execute transactions at the best price and what impact post-trade transparency has had on transaction cost and liquidity. He also wants to know if online, alternate trading systems have changed the muni market or benefited retail investors.
On the muni market’s status and future, Hultgren, plans to ask how the 2008 financial crisis changed the market and how muni bankruptcies have affected it. He also wonders if the current regulatory structure serves all market participants fairly and how the SEC’s new muni advisor rule will impact the market.
Another key question is whether the financial services committee should consider legislative proposals or more regulatory oversight on munis.
Panelists are expected to include Chris Meister, executive director of the Illinois Finance Authority, Tim Firestine, president of the Government Finance Officers Association, Shawn O’Leary, vice president, senior research analyst, and manager of Nuveen Asset Management’s municipal fixed income group, Mary Jo Quinn, an investment attorney at Allstate Insurance Co., Brian Battle, director of Performance Trust Capital Partners, Rich Ciccarone, managing director and chief research officer at McDonnell Investments, Stratford Shields, former head of public finance at Morgan Stanley and others.
The Chicago Fed said its conference will examine, in the wake of Detroit’s bankruptcy filing, “how other cities facing fiscal crises regained the footing.”
The program is expected to explore “best practice government oversight programs” such as the North Carolina Government Commission and what strategies and governance changes seem most effective to maintain future fiscal stability.
Panelists will include Anthony Minghine, associate director and chief operating officer of the Michigan Municipal League, Lisa Washburn, a managing director at Municipal Market Advisors, Stephen Fehr, with Pew Center for the States, Eric Lupher, with Citizens Research Council of Michigan, Frank Shafroth, director of the Center for State and Local Leadership at George Mason University, Robert Inman, from the Wharton School, University of Pennsylvania, and others.
