Experiencing unprecedented declines in activity. Although the remains considerable uncertainty about the economy, we know that the Banking System has served as a source of strength throughout this period. They have supported their customers and committees by pppinating 500 million in loans. The Banking Systems ability to support the economy reflects the Industries Strong capital and liquidity position. In the Second Quarter of 2020, Equity Capital increased to more than 2. 1 trillion, which 13. 4 . Ted to highervels were slightly than the quarter preceding the pandemic. Taken meaningful action to provide banks while maintaining safety and soundness. I will provide an update in five areas in which we have made significant progress. Supporting communities in need, encouraging outstanding loan making. I would like to briefly touch on each of those, starting with our response to the Economic Risks related to covid19. We undertook a series of actions that helped maintain stability in financial markets. Many targeted, temporary revelatory changes to facilitate lending. Over the past six months, we have taken additional regulatory and supervisory action in support of these objectives. We continue to monitor considers and we will Additional Guidance as appropriate. Readiness, we responded to the Immediate Impact of the pandemic and we focused on enhancing our resolution readiness. Although we entered the pandemic with an historically low number of Bank Failures, we recognized the absence of failures could not last forever. Capabilities by centralizing our supervisory positions for the largest banks, establishing new approaches to out protect the help of our employees during the pandemic, or needing with her International Counterparts for global systemic banks, carrying ,ut targeted engagement reviewing institution and financial Industry Data to inform Resource Management and prepare for activities if necessary. We have been mindful of supporting communities in need. As the pandemic continues to distract the daily lives of all american, we are particularly mindful low income and minority communities have suffered disproportionately. We placed an ohio control in helping these institutions meet the needs of their customers and community. It increases inclusion in traditionally underserved communities and one of my priorities has been expanding one of the options for exploring is a framework and investors interested early in particular counties. There would be channels to make investments in their still developing details but expecting more information in the near future. As they consider additional ways to make inclusive Banking System , we must recognize the financial benefits. It provides access to new products and services and a recent biennial survey shows that the individual is increasingly moving to digital banking. Continue, they should be able to improve the way banks are rate how they are wee to serve their customers recently saw feedback on a groundbreaking approach to Building Technology partnerships our crest for information proposes a partnership to help. Roduce the and uncertainty reducing these barriers to innovation is particularly important for Community Banks and we look forward to reviewing information from interested developing then next generation of Advisory Technology to reduce regulatory costs and improve the ability to quickly identify emerging risks. Lessons learned in these events will not only increase the effectiveness but also lay the foundation for streamlined tech integration. We continue to focus our efforts with the Financial System and there are two rules in section 19 of the fbi act, both of which bring clarity to the market. Regulators,with modify requirements regarding the collection of the initial mark, and establish a longterm quiddity market. To finalize two additional roles in the near future. Lets wrap up soon. Thank you for the opportunity to testify. No problem. Finally, chairman hood . Thank you good afternoon, chairman, Ranking Member and members of the committee. Thank you for the opportunity to provide an update on the state of federally insured credit said efforts to assist. Credit shares rose to trillions of dollars. , the ncua hash worked to provide Credit Unions with relief and flexibility so they could continue serve member who protect our staff and we all continue to work remotely and effectively. We have issued 11 interagency statements for the industry to date helping Credit Unions address the risks and changes that have been made in response to the pandemic. Bey have provided who will the assistance for income and credited minority assistance. It went directly to covid19 assistance. The Credit Network increased 6. 6 to 182. 9 billion. It is well above the 7 center. Our requirement the fund is also strong in the ratio remains well within the statutory range credit act. Need gets there is no there is no need for Credit Unions rising to an alltime high of 1. 5 trillion in all major categories credit meters collectively extended a . 4 billion in loan under the Paycheck Protection Program within an average loan amount of 49 dollars. Like capital, liquidity is a pillar of strength upon the bedrock of which the system rests. They have contributed greatly to bolstering availability of liquidity in the system since the act was signed into law, they have successfully convinced Credit Unions to join the clf. Today, the capacity has expedient exceeded 32 billion. They have provided muchneeded authority for the cares act, however i respectfully request these changes be extended for the pandemic duration so they onerespond effectively important lesson is the need for greater inclusion. Not the least of which is that pandemic has had an impact on communities of color. Since becoming the 11th chairman, i have made Financial Inclusion a priority within the agency and credit as a whole i recently reinforce that , advancing communities to credit, education, stability and support. This is an attempt to modernize and refresh programs that all support the agency system. And will address the specific needs of diverse. In closing, i would like to thank the committee for the opportunity to appear before you today and discuss how they are to help them during this challenging time. I look forward to your questions. Thank you for the opportunity to be here and thank you for your leadership. It has been an absolute pleasure. I would like you all to keep your responses to the 30 or 45 second is like to get a question as well. Fed in october asking each of you to use your discretion to minimize the regulatory effect. I have that some of you have taken actions in that regard. However, there are still a litany of rules that impose a burden on our institution simply from passing assetbased rigging tory thresholds. The question i have first is what additional areas can you use your discretion in their subject to significantly more burdensome regulation different from participation that are eventually expected to revert in size eventually . I am happy to start with an answer to the. Flexibility in our Regulatory Framework with respect to some of the measures and increased a stringency. And we aree that continuing to look as to whether with respect to some of the majors, we are not currently seeing they are going to pose a problem. Principally an issue for Smaller Banks being pushed up and the larger banks being pushed into the next category or whatever we are not seeing that is actually happening with the larger banks but Smaller Banks can be put in some materially thinkifficult areas and i we need to look at what we need to do their. I would begin by echoing the statement in the recent remark that members of the board of that are subject to asset size thresholds. Theyre currently working on a set that would relieve for a time certain asset that trigger heightened scrutiny. And just Orient Committee members on this, there are a number of different requirements to kick in. And i think the direction of that discussion is something that will cap out at billion dollars. Vice chair has it exactly right that larger levels, banks are capable but it is Smaller Banks that have difficulties. Just close by saying that one thing that is important thee must accommodate dislocation created by the covert pandemic situation and at , it is important to supervisors that we have reals ability. Chairman, were down to just a minute so you got a little cheated here. I got a little cheated earlier. I will yield the time for chairman hood just a small banks have done a disproportionate amount of lending. It is only appropriate they look at control and accommodate them. Chairman, my specific question this to see if you can focus on the comments youve heard. It really is important. One of the things i wanted to note is that credit and chairs in the last thing we need is for a third of americans to not have act credit during this time if we could provide any kind of relief which would simply be greatly appreciated. It allows management to focus solely on meeting the needs of member owners. I think if we can provide the relief at a temporary basis, safety and fairness will still be preserved and i did write this so any relief we can get would be greatly appreciated. Brown . Tor we have all had an opportunity to serve the country at the highest levels. As this administration winds down like to thank you for your service. Looking back, i do think you have left your agencies, much less american families. I dont think you have left them better off that when you took office. Each of you couldve done so much more to improve american lives especially during these last months. Instead, you finalized the wall street wishlist. Ise chair for all, your job one of the most crucial to prevent a banking crisis in 2006, you painted an optimistic picture of the economy, saying your offering quote perspectives me likeand it sounds to an economists shouting fake news. The 2008 crisis was very real, and as far as i can tell you learned nothing from it you now insist that even though millions of struggling to stay their jobs and houses, the future is right. It will inevitably cause normas losses for banks. For almost a year, you have ignored the pleading for me and other to stop Bank Dividends protect the Financial System. The recent fed recognition to address racial inequality is another lesson from 2008, that a financial crisis would disproportionately destroy wealth and opportunity for people of color. Last week, 80 million voters rejected that thinking. It ensures the viability of small banks keeping your deposit safe. Roles thatey have are meant to keep megabanks from crashing the entire system, risking a repeat of the hundreds of failures that happened in the last crisis. Thatpproved a merger created yet another to big to fail banks that will likely muscle Smaller Banks out of existence. Recently, you decided to short data that proves millions of households dont have all the Banking Services they need. It by literally erasing those families from the fdic it is many of the same people would suffer. Your tenure has made life easier for big Bank Executives but it is going to hurt the communities your agency is supposed to serve. Last week, 80 million voters rejected that thinking. He was known as a foreclosure machine. It makes no sense that the outgoing president handed the wheel to the economy to sony people who had a hand crashing 2008 even though you are running without the approval of the senate you have made sweeping changes to regulations used to lobby for. This type of selfdealing that has eroded so much trust in government and the. And last week, 80 million American Voters rejected that. Chairman hood, you are the only one i voted for for confirmation. Youre providing credit in black and breck unities in small towns we have aamerica unique ability to help those left out of our Financial System but instead of standing up for them it seems you are more we now on currying favor have an opportunity for financial regulars to do what they should be doing. Thetions have consequences wall street first attitude is over and president elect biden my colleagues on this committee know he is the president elect but fear keeps them from saying. Will have then opportunity to install watchdogs that their government is on their side. Thank you. We will now turn to senator to i would like to begin by congratulating each of our witnesses i would congratulate you on doing some outstanding. Think about what they have been through as country. Yearsrst pandemic in 100 in the first time in the history of the republic that our state intentionally closed our economy. It has never even been complement contemplated before, much less taken place. We all understand why but what i find extraordinary is that despite the unprecedented catastrophic illumination of our economy for some time, yet andst no Bank Failures america rose to the challenge. Providing credit to small and mediumsized business consumers on a scale that most of us probably never imagined, that Financial Institutions weathered the storm because they were well regulated, wellcapitalized ready and willing and effect did respond to the needs of their it amers, men and women remarkable success story. Stress that part of what is made that possible the and i wantn the lead chairman for the vice that i believe those facilities were a remarkable success. Intended to restart the private lending of americas economy. To provide a backstop so that private capital could flow in businesses could borrow and therefore stay alive keep those workers in place and have an economy when we get to the other side what happened is as soon as the roast as those programs were authorized, capital start flowing like never before. Corporate bond market and high yield and credit alltime record issuances. Available very reason and its a big the economy has her covered as rapidly as it has we know theres work to do but economists all over the world thought it would be 10 limit by the end of the summer and it is not. If the program did their job, the private sector is providing the capital it needed, is now time to terminate these programs and frankly to take a victory lap, that we have gotten our economy back on track and it is definitely heading in the right direction. Followup on the question raised by the chairman. There was a discussion about the increased regulatory burden. For no reason other than the fact they really stepped up and respond to the crisis by triggeredand that has of regulations, the most costly of which is the government mandated pricefixings. I would just urge you to consider ways in which you might ensure that we dont punish. Anks aboutd like to ask also the transition away from libor and i mostly concerned about the contracts that have existed for years and extends into the church. The index is available for ongoing payment. What are we going to do about and thephan contracts data in which we expected no . Onger be operable i think we could consider a mechanism that would and now socalled legacy contracts to basis on their existing without having to be renegotiated. Allow the continuation in the writing of contracts. I think there are a variety of ways to do that we have been. Iscussing that with the banks within the next month or two, we have a plan this year that will address that. Obviously, it is a reference based upon the zero dollar deposit market and it continues. What makes sense to simply have a different mechanism for establishing with the side of that market is . We could think about that. It would be synthetic and synthetic reference rates are something the bank of england have thought about. , because of the litigation framework i want to think of other ways to try to address that issue. Mr. Chairman, i dont see 00. You are a little over. I apologize and i yield. Senator reid . Thank you very much, mr. Chairman, in a station in the river 23rd, you agreed with chair powell we will take continuous support to stay whichobust recovery implies a second major covid bill. Position . Ill your i would say that if there is to be another active cares act stimulus is ultimately a as we lookr congress at the evolution of the economy as the senator noted, the economy is recovering more robustly and rapidly than we had , even thene spring we expected a couple of months ago. Out,when we get reports the numbers improve. I think probably the most accurate thing to say would be the Additional Support but i woulderway not want to say this point that it was necessary. Going back to what you and the chairman said not too long ago one of the major aspects of the cares act could support the local government. It is, i think, critical to do they are running into really difficult choices in terms of praying Public Services and raising taxes. And without Additional Support, they will have to do that, which i dont think will help stimulate the economy or aid the did y so one thing we so its something we did in local assistance that we did not do in the cares act it draws distinctions between the kind of support the fed provide to spec start lending. Governmentsny local , may not be the answer to their issues to acquire more debt and ourts they could acquire that they be made providesn terms additional fiscal support and the latter would be again a decision the congress would make and require cut quite different tools. But it would complement what , and because of additional resources, states are prevented from using their revenues to cover lost that for many states is the critical problem they have and isy pointed out that this replacing alltime revenue with permanent tax increases. City think the flexibility is think do you flexibility is needed . Let me speak to the Federal Reserve. Supportroader range of for congress for the baby to sign. Question one more chairman. Chairman williams. This might be more of a final point we are facing a housing tsunami. The National Council state owecies indicated you will up to 34 billion by january, increasing eviction filings by billions just have a few months we will have in january hundreds of thousands evicted or foreclosed in the midst of the indemic, were sleeping five a bedroom is not the best medical device to give. And indeed, we have to do something, so i would hope that the Housing Committee would be thinking hard about supporting effort to provide Financial Relief to these renters onntually, as they foreclose the landlords, they will have a lot of property on their hands, which might not be very valuable. And respecting the chairman and his graciousness, thank you very much. Thank you, centre senator. Forthank you to the panel being with us this afternoon. Broader financial encryption and the product reached. As someone who spends most of to identifyorking and reduce barriers to economic mobility and opportunity to expand access to credit and i was deeply encouraged by these initiatives that have an update of access. Thank you, centre, and thank you for your continued engagement on these issues. Intersectionthe and we think this was a terrific dialogue. On project reach, most of you are aware that there are three major components at the national level. There are tech executives around the idea of building score for the 45 million american not have america, the in way americans build wealth is through homeownership so its hard to buy a house without a mortgage and you cant buy a a mortgageore without a credit score. Without a mortgage and you cant buy a mortgage without a credit score. These accounts with most of they these accounts that most of them have, it is relatively doable. It will allow the people the opportunity to be considered for a mortgage that would be a game changer when it becomes available. The second piece has to do with 20 payment armed requirement. The percentage of people who inherit money is disproportionately favoring whites and asians and disproportionately disfavoring blacks and hispanics who more often than others, not inherit money generationally. We have offered some support for that, but we think that a more radical examination of the system is wired and various projects have talked about there are a lot of people who are very enthusiastic about the ability of drawing through capital sources. Thingsthe most important we are working on here is reinvigorating the commitment of large banks to support Minority Institutions and so the other thing we expect to be announced andhe project reach pledge also engaging in executive Training Programs and real business partnerships not just to make them successful. Lot isson this matters a aree Ongoing Trust filters the reason why Many Americans dont feel comfortable feeling american feel comfortable dealing with banks who they feel have scanned them in the past and that is an important entry point. Senator scott becoming the chairman i have long advocated that Financial Inclusion has been the civil rights issue of our generation and im pleased to work with colleagues to advance communities to credit, education, stability and support to continue to have small dollar loan products for 40 of american not able to come up with 400. Work to ensure access and imidual amounts please Credit Unions have made hundred 71,000 but we want to do more. Education. Ces how do we provide educational coaching and health . Not just how they get in, but how they remain sustainably we hope the vendors will really help propelling to the mainstream of the economy we 509 mpis and we want to do more than strengthen want to make sure they are empowering communities of color. They are providing Technical Assistance and grants and we even want to encourage bills that you championed earlier. They are all on the frontline when it comes to providing Financial Access and support. If you are going to have mainstream success, they implement at the Second Chance initiative where individuals cannot work in our Credit Unions. Opportunitiesg for themselves and others that is operation access. I know that i am about one minute over my time. Im just going to submit more for thes to record chairwoman as well as vice chairperson. Thank you for coming to charleston and being willing to go across this country, promoting ways to help the credit become invisible as well as the challenges. Your work has been frankly some of the most nonpartisan work. Earlier, the house subcommittee found the Treasury Department privately encourage lenders to prioritize existing customers when issuing paycheck protection loans, leaving many minority owned businesses without access to important federal aid. Share, werer and you aware that the treasury privately incurred banks to focus on their lending to existing customers. We know there was an issue which did leave some banks to make judgments themselves but im not aware of what he suggested just now. Likely, i was not aware that we werehat initially asking banks to originate these loans quickly so that people can paymentsnd make their as the result of that, reaching out to existing customers alleviated some of the burden. Head of thethe American Banking association told its board of directors the treasures would like them to go to their existing Customer Base. On there was an understanding from treasuries that banks will be working with existing clients. You must know this is unofficial guidance and did you push back . N that regard early on in the rollout one thing we saw across our banks was not that they were favoring customers but that they were having a hard time with clients in the door the Rapid Response framework. One of the things we did is convene a set of listing to adopt customer identification tools to allow them people already in their system. We know anecdotally that there are results in partnerships in the Midsize Community bank there were able to ramp up new customers. Community banks are costly reaching for their customers to the extent that there are new inquiries. Dont you encourage banks to extend lending beyond their Customer Base . Senator absolutely. That was the purpose of the sessions i mentioned. Did you urge them to extend more yacht the Customer Base . The whole point to help them overcome the hurdles. I would simply say that many minority owned do not have existing banking relationships and the relationship to , and both of the inactions have had dedicated cant on our nations minority owned. Loans left minority businesses out of trillions of dollars in federal aid and now businesses,owned 32 percent of latino owned businesses are permanently closed because of the pandemic but me ask you, controller brooks, mask about your agencys work on the Community Reinvestment act . That theres evidence they are failing to serve minority communities. Since then, the Federal Reserve issued proposed rulemaking on how they can be strengthened and meet core purposes. When the fed issued this you stated quote i am told the fed to get good comments in response to their mood making. But can you clarify what exactly you meant by that customer seems to me the fed is likely to and what theyts whatn response to your would leave you to change your mind now . That it ist thing is so similar to the final approval and its substantive developments as to be almost indistinguishable in terms of their changes their inclusions of native americans small farms and other things. We took it as the sincerest form of flattery. The main difference between rules is that the fed appears to prefer discretionary performance will i really meant is that both the fed and the occ recognize the status quo is simply untenable and had been tied thank the area incentivize for letting in investment. Our basic view was that we need to make the system better and it is a way of making it still better next year, we are happy it sithat but letting was, in our view, and on acceptable option. The entire Civil Rights Committee has a very different point and if anyone is an advocate for these people, it is thank you, mr. Chairman. First of all, thank you very much for participating today. Past, we should not be making it harder for banks to do their jobs considering we are flying on the banks to lift our economy out of a covid slump. , im worriedead the regulatory burdens will only accessible temporarily exclude low to no risk assets and made sense given the flight to cash that took place. It is said to be cap led by the end of the year and is not to be adjusted to take the same considerations into account. Im worried not writing a similar adjustment could prevent our economy from doing its job when we need their help the most. Do you agree with me that it would make sense for the supper metro leverage ratio . I think there is a logical analogy there i think what we see is that we are not hearing from the large firms that are affected by them that the changes in their Balance Sheet over covid are leading them to possibly being pushed up to the higher bucket relieving them to contract activity in a way that we would not want. As we look at the final ,mplementation of the framework which i intend to accomplish over the course of the next year , we should look at the overall package of measures put into and ensure that they are all calibrated and that the system remains roughly the same. I think that is the right time to look at the calibration. If we were hearing from a lot of firms that there was a real be aem arising, that might different story, but at this moment we are not. Ask we will see what todays thoughts are. Thank you for that. Releasedh, they reviews for banking and Financial Services and i was anprised there was actually increase in the percentage of american households that are on bank. High for a 10 times family in south dakota. Particularly involved areas like native American Reservations where there are not only people color but literally the reservations as well. Is critical ins the months ahead. To increase the number of under banks native american the near future but also longterm. Thank you for that question. It is often how we figure out how to get more people to be part of the Banking System. Estimating that the Banking Community has been particularly affected in this area. Innovation iswere better for them to do so in a responsible way. It is going to be pivotal to ensure the have access to credit. Also trying to help the Minority Institution but especially native americans in the eyes that serve those areas in particular, particulates have access to capital. And i mentioned in my earlier statement we are created an unprecedented fund that would be managed by an outside party. Help and myll go to hope is quite a bit of help would go to the native american institutions. I suspect that my time has expired thank you for your response. Thank you for testifying today. Oh to start with you, vice chairman. I want to go back to a question jack asked you that revolves around the need for additional and i just want to give you the opportunity to clarify and preface this question i say we have 125,000 sectionals a day. Hospitals are full all over the place. The fact that my wife had major surgery last week at her recovery was in the pediatric unit i said, why she in the pediatric unit . And they said because they said because the wife is full of Covid Patients this is the only debt they have. Bed they have. My question is we have schools, units, Small Businesses. A bunch of people out there who are still in a world of hurt. I had one doctor tell me that january, february and march might be the toughest month this nation has ever endured. So tell me if you really meant that and if there was not a need for additional stimulus. What exactly did you say . I do think that we are, i would not want to understate at all the degree to which many people in the country struggled as a result of covid event. The question that i was trying to respond to with regards to that would support be appropriate for them and drawing the distinction. Let me cut to this. Is do you think that there needs to be another statement, . . Generally speaking be another ,tatement, generally speaking that focuses on the economy . Do you think there needs to be another package . Again, as essential banker, i should leave those this decisions i should leave those decisions to congress. Come on. You gave us your two cents on this deal and now youre saying now it seems like since the election there is a different interview. That kind of thing drive me crazy. It is the result of the fact that the economy is recovering faster than any of us. Ok. Got it. So from the very getgo on this the economy has followed pendant right down the line and i guarantee you that when hospitals are full people are dying in record numbers, that information gets out there people dont go out. I got two brothers who are older than i am go out very seldom because of this pandemic. So my question is simple. Different thats fine. My question is to assume role as. Congress clint howell said, i said i agree neighbors say i dont want to make a statement on. What you are a central banker and do have an impact on the economy and decisions on what you made her advocate for people actually listen. And here you are saying its not your problem anymore there will be a newness administration in two or three months and thats just what happens is that right . That is not what im saying, senator. Not answer the question as to whether we need more money in the economy are not thank you aired and i will tell you im very disappointed in that perspective. You were very different a few months ago. Chairman kennedy. Thank you, mr. Chairman. Can you hear me ok . Let me know when my time is. Etting close what percentage of small american sized in your judgment are losing money right now . I dont know that percentage. I justnd it out tried to get your sense for the economy. Do you think it is more than half, less than half . What is the hunch . The number of businesses losing money . Small businesses . Half butably less than i would want to get an Accurate Answer for you. The economist had a piece yesterday saying that its best. Orecast but thats most businesses in america in terms of jobs. What is your sense of the economy in terms of whether we have recovered from the coronavirus yet . Of course, and how long is going to take us to get back to the previrus treaty. We obviously have not recovered. I may have over assessed on the question of whether it was half were not. There is a great deal more coverage in the country in the matter time that would take his heart to tell it is being done sections of the myers. Year, we arenext going to have recovered to the precoronavirus gdp. Gut . Is your i projection is that it would take longer than a year. Towardsexpect us to be our precode levels in 2022. Andf we did more stimulus it was targeted in the right way . With that help . Would that help . It would accelerate the speed of the economic coverage. I think that is unquestionable. Ok. Let me talk to you for a few minutes about the treasury market it almost froze up, did it not . For a time in march, yes. There was a severe stress. People throughout the world were actually trying to sell treasuries in exchange for dollars where they not smart yeah, selling in many different quarters and around the world. s when we had the meltdown in 08, and everybody was running to treasuries as a safe haven. This time, they did not even want treasuries. They wanted dollars cash. Dollars, cash. If you want to unload treasuries, you have got to go through a primary dealer. Is that the pervert is the proper term primary dealer or primary broker . Primary dealer central dealers in the treasury market. Treasury securities can be sold and cash can be maintained in other ways. Have many primary dealers do we have . About 29. Ok. Why do we have to go through primary dealers . The primary dealers were part of a problem which is why you guys had to step in about 30 seconds, senator what we set up a system where we dont use primary dealers or where people can trade with each other . We have a little bit of trouble with the audio at the beginning. It looks like we may have just lost him again. Can i get my time back . You can have 30 seconds, senator kennedy. He is gone, right . He may be able to hear us. While that is pretty convenient. That is pretty convenient. You hit the old sapir button. Well played, randy. Why do we use all these primary dealers . Why dont we set up a system where people can trade with each other . Whomever. I am back. Did it fail again . No, i am back. And it was not strategic. I do want to answer the question. I think it is fair for us to look at secondary market trading of treasuries going forward. That is a lesson learned. We have an Interagency Group together to look at alternatives. Thank you, mr. Chairman. Warren. Or thank you, mr. Chairman. Thank you to our witnesses for being here. All of you are in charge of making sure regulating the bank [indiscernible] our Financial System is going to be able to weather the storm. And livelihoods depend on you getting this right. The soundnesstle of the Financial System is to conduct stress tests of the largest banks to see if they are going to be able to handle a severe downturn. In a recent analysis, the fed tests tend to be dependent on the assumption that there will be additional grounds of economic stimulus. If there in good shape federal government passes a strong stimulus bill to help the people in businesses that are struggling. Feds analysis was released in june. The assumption that was built into the stress cast stress test republican whose name i see is cotton. Senator, the answer to that is no. There has been no economic stimulus since you have released that report. Democratsago, house passed a comprehensive relief bill. For six months, Mitch Mcconnell has refused to let the senate vote on that bill. In the meantime, Unemployment Benefits ran out, evictions resumed and black and Brown Workers pay the highest price. I am worried because this creates a very dangerous cycle. Families cannot pay their loans. The banks and our entire Financial System is at risk. Sure enough, the banks are reporting they anticipate higher loan default rates. Bankst stimulus, to the and the Financial System do the banks and the Financial System run more risk . Have we lost the vice chair . It sounds like we have lost the vice chair again. Im sorry, senator warren. This is something that only works for the vice chair. Only one [indiscernible] it was there at the beginning of the hearing. I am not suggesting this is strategic. Do you want to let somebody else go and have me finish my question . The next on my list is senator schatz. Do you have questions for someone else . Is senator van hollen. He may not be with us. He is signed in. Senator cortez masto . Senator van hollen is here. The good news is i am here, mr. Chairman. The bad news is i also have some questions. We are doing our best to get him back up. Senator jones. Not i do not know what to do folks. I do have some questions. Senator cortez masto. You can help us out hopefully. The extremeart with lending rule. Do you still intend to move forward with the lender rule . Thank you, senator cortez masto. As you know, we have just finalized that rule. We believe it is important for a variety of reasons. The most of porton of which is solving the ageold problem of rent a charter where banks were claiming responsibility for loans they originated. One of the purposes is to focus compliance obligations where it belongs, which is the banks who hold themselves out as the lender. Can i ask you then why are 13 nationalre are consumer and civil Rights Groups and what their 100 groups submitted comment letters that your proposed rule would facilitate fraudulent schemes and otherwise undercut the Interest Rates on some of these loans. How do you address that . There is a lot of additives and adverbs in the accusation to unpack. There is the inch the issue of Interest Rates and all of the other Consumer Protections out there. When it comes to Interest Rates, the congress and Supreme Court decided in the late 1970s and early 1980s to allow both National Banks and state banks to export their home state Interest Rates to other states. If you think back to that era, there was rapid inflation. In my the states in many states, it was difficult to get a loan. That was one of the ways we got through that financial crisis of the late 1970s. All that is going on in our true lender rule is the idea that banks can originate these loans and they can sell those loans on the secondary markets as they always have without questioning the legality of the original Interest Rate authority. The innovation of true lender is to make sure somebody is responsible for the Consumer Protections associated with that loan. In the last 25 years, nobody has been responsible. We facilitate banks doing what they have had the authority to do since 1978 and we make clear if they enter into these partnerships, they are responsible for the fair lender law compliance. And every other thing that neither the banks nor their partners have taken accountability for in the past. The point is to bring more credit to more people and to create accountability where there was none shared i appreciate that. I would ask that you continue to watch it. I a former trade general know this now. There are several lawsuits because you have lenders like elevate, that have just been sued from the district of columbia. You have loan mart which is being sued by california and others utilizing this opportunity to circumvent the Interest Rates that have been said by 45 states and the district of columbia, which are predatory loans with higher Interest Rates. I would ask that you consider taking a look at that. The biggest concern particularly now during covid19, somebody people are struggling. They are going to look for these loans and there are going to be predators out there. It would be the worst to see that your new rule has opened the door for those types of predatory loans. Say absolutely. The good news is it gives us the authority to police those from the banks side. Let me jump back and talk about total debt restructuring. In some parts of nevada and across the country, barbers have begun repaying your loan. In las vegas and other plaisance reliant on hospitality and tourism, Business Owners do not have the income to pay their loan in full every month. Let me ask chair hood, do you think some Credit Unions and banks are at the risk of failure . A history of helping in times of adversity. The data we have today, Credit Unions have entered into covid with very strong capital, while bill well above our requirement. From what we are seeing in looking at call report data, they are doing relatively well in the sense they are continuing to provide forbearance. Credit unions have already provided 1. 7 million loan for variances for an amount of 55 billion dollars. Almost 50 of our Credit Unions are providing some type of forbearance. We do believe we have the tools to keep the Credit System safe and sound. If there is one ask i would have it is to continue working with you and your committee. Liquidity is a major pillar of our industry. While we have solid liquidity now, i think in the future it would be nice to know that we do have that extension beyond december 31 of this year. I think the Credit Unions are in a position to continue doing what they have always done and that is providing member service. I believe we have been able we have been trying to hook up with vice chair quarles by phone. Do we have you by phone . Yes, if you can hear me. We can hear you. Elizabeth, we can go back to you now. Have him and his voice. At its ok. I will try to pick up where we were. The fed conducted stress tests on the largest Financial Institutions so that the Financial Institutions are helping if but the capital forecast tends to be based on the assumption there will be additional rounds of economic stimulus. Ive been no additional rounds of economic stimulus. There have been no rounds of economic stimulus. We have seen a lot of Economic Indicators and the pink and the banks are saying they anticipate higher default rates. The question i had been asking is without stimulus, do these big banks and ultimately the Financial System run more risk . That as younote noted in your original question, the banks projections themselves assume stimulus. That is not the question i am asking. Also, the question about how much capital they have got obviously goes to the heart of your stress test. You said in the stress test the projections on capital depend on there being a stimulus. Families need help. They have needed it all summer, Mitch Mcconnell has stubbornly crossed his arms and refused to let us vote. Now the Senate Republicans are doing even more damage to our economy if they do not put a relief bill out that is big enough to get the job done and up for a vote. Is a problem obviously at the senate level but the fed itself is not powerless as well. You could act right now. You are allowing the big banks to continue to shovel billions of dollars out of the door in that could beey used help survive and historic downturn. You could stop this outflow of money right now. Fedt what point will the actually do its job and suspend all dividend payments. Capital ratios have been rising over the last six months. That is not the question i asked you. What i asked you is what data are you going to need to see in order to take action here . We are watching a downturn in this economy. The stress tests say they are based on the assumption there is going to be stimulus. Which mcconnell has refused to let us get stimulus. I am asking about the billions of dollars the banks are still pushing out the door in dividends because ultimately, the american taxpayer is going to be on the hook if these banks are not going to be able to meet their requirements going forward. And so we are running stress tests currently and the stress tests do not assume any stimulus. We are running stress tests currently to determine the resilience of the banking sector. We are now running additional stress tests taking into account what happened in the spring and the condition of the Banking Industry and the economy as a result of that. We will have the results of those stress tests revealed publicly at a bank by bank level at the middle of september and we will use that information to inform our determination whether we would continue the suspension of the 70 of capital distributions we have already imposed on the banks. Let me just stop you there because we have already had to do this for a long time. Your job is to protect the american people, not the bank investors. I do not believe you are doing your job shared Mitch Mcconnell has changed his tune. He says he wants to pass a relief bill before the end of the year. America needs a real relief bill, not a fig leaf. There are not enough fig leaves on the planet to cover up the republican partys monumental failure to take this coronavirus seriously. Sick ats are falling the fastest rate since the pandemic began. It is time for you to stop letting these banks shove money out the door, stop making excuses and do your job. Thank you, mr. Chairman. Senator schatz. Thank you, mr. Chairman. Vice chair quarles, about a week ago, new yorks financial regulator said it would start integrating Financial Risks into the supervision of new york charter banks. The banks will conduct enterprisewide risk assessments on how Climate Change impact to credit risk, market risk and other core business risks. Are you following what is going on in new york and do you agree with the new york regulator that banks should integrate Financial Risks into their portfolio, into the Risk Management frameworks . Of the banksision is a board responsibility that is delegated to the reserve banks. So yes, of course im following that and of course i would agree with it. To follow up on the conversation we had in december ds joining the network for the greening of the Financial System which now consists of 75 members and routine observers. You told me the fed had been auditing the class before formerly formally registering. Chair powell said the fed was in the working groups. Joininge we on formally the network for the greening of the Financial System as a full member or observer . That is really up to the ntfs. We have requested membership. I expect that it will be granted. Do you know what the timeframe is . I do not. They haveld say an annual meeting that is in the spring, which was the last time there was a lot of work around this. I suspect we could join by the spring. I could get the answer for you. Could you please . And to the extent any of this has been reduced to writing in terms of a formal application, could you provide that to the committee please . Absolutely. We will get you information on that. You also said in december you were closely engaged with the bank of england on how they are looking at Climate Change and regulation and supervision. Are you still engaged with the bank of england and could you share with us what you have learned or what you are working on . Had excuse me a meeting last week with the bank of england. Of the ecb on questions Climate Change is something we discussed. We have been particularly monitoring how it is that they are thinking about their inclusion of Climate Change in their stress testing process. It is a different process from hours and they read a very preliminary level still in the process of thinking about it, but we are definitely involved with them so that we understand that as it evolves. As a point of clarification because i and others have introduced legislation to this isect my understanding the fed has the full authority to move forward on this because risk is risk. It might be helpful to clarify this through a change in statute, but you do not need a change in statute to do any the things you need right now as it relates to climate risk. Is that your assessment . That is correct. Supervision report we published last week does include a section on Climate Change. That goes into more detail about how we are thinking about this and incorporating it into our supervisory activity. Just to point out, will have different views about Climate Change and solutions that should be undertaken, but risk is risk. The fed and other financial regulators is to measure that risk whether it has n ideological argument behind it or not. Risk is risk. I also want to thank the fed for loan sizehe minimum to encourage more Small Business does to an Small Businesses to purchase a pay. There appears to be very little uptake. What can we do to push money out to these Small Businesses who appear to not find this to be a particularly Attractive Program . Programs ande fed the main Street Program is not different in that respect. As fed facilities operate backstop. They achieve their function when they restore competence to the private financing markets. I think you can say that has happened with the main street facility as well. I do not actually view the limited take up so far of the mainstream facility as necessarily a sign of its failing. You could view that as a sign of its success if needs are being set aside by the private sector. That is ultimately what we want as opposed to be saddest opposed to being satisfied by the fed. I think it is useful to have bit out there showed the economy develop in an adverse way should the economy develop in an adverse way. Thank you. Thank you, senator schatz. It appears that senator van has left the meeting. Senator van hollen, are you with us . I think he may have had to leave the hearing. Senator jones . That appears to be all of the. Enators who are available do you want to make a final, and before we conclude the hearing . I do not. Thank you for asking and thank you to the four witnesses. Thank you. With that, that will conclude our questioning for todays hearing. For senators who wish to commit senators for the record, those questions are due to the committee by tuesday, november 17. To each of the witnesses, we ask you respond to those questions as probably as you can and thank you for joining us at the committee today. This hearing is adjourned. You are watching cspan, your unfiltered view of government. Created by americas Cable Television company as a Public Service and brought to you today by your television provider. News. E campaign 2020 North Carolina republican thom tillis has held onto his senate seat after democratic challenger kal cunningham conceded this afternoon. Republicans now hold 49 seats compared to 48 for democrats. Three races remain undecided. Alaska where incumbent republican dan sullivan is leading in georgia, where two runoff elections will take place in january. According to the North Carolina state portable elections, senator tellis received 48. 7 of the vote. Watch American History tv in primetime on veterans day starting at 8 00 p. M. Eastern. Military historian Patrick Odonnell on his vote his book, the unknown. Americasn story of unknown soldier. Then two real america films. Eastern, the film African Americans in world war ii. A legacy of patriotism and valor. Film 20 p. M. Eastern, 1945 the army nurse. Tvch American History wednesday, veterans day, starting at 8 00 p. M. Eastern on cspan3. Use your mobile devices, laptop or phone and go to cspan. Org election for easy access to election 2020 result. Our latest video live and ondemand on the transition of power. Go to cspan. Org election. Earlier today, the Supreme Court heard oral argument in california the texas. A consolidated case concerning the constitutionality of the. The justices to decide whether the individual mandate is unconstitutional after the 2017 tax law enacted a monetary penalty for no coverage. The court has until next june to issue a ruling. The honorable, the chief justice and the associate justices of the Supreme Court of the united states. Oh yea, oyez, oya. All persons having business before the honorable, the Supreme Court of the head states are advised to give their attention where the core is now sitting
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