Order. Today we will receive test her name from the honorable Federal Reserve vice chairman for supervision. The honorable with mcwilliams, chairman of the fdic, and the honorable ronnie hood, chairman of the ncua welcome to all of you. This hearing provides a committee an opportunity to examine current state of and recent activities related to regulatory and supervisory activities of these agencies. Its been over a year now since the enactment of s2155 the Economic Growth regulatory relief and Consumer Protection act and the work of the agencies to implement most of the law of provisions. Including the tailoring rules for u. S. Banks and u. S. Operations in foreign banks. Your agency should also carefully review the existing supervisory frameworks and make any necessary adjustments to appropriately and line them with the tailoring rules and requirements. Im july 30th, 2019 all of the republican Banking Committees and i sent a letter to the federal banking regulators urging your agency to finalize several outstanding provisions of s2155 such as the Community Bank leverage ratio and shortterm or short forum call reports. And further tailor regulations to promote Economic Growth including addressing the current expected credit losses, the county standard, vocal brawl, the unaffiliated margin, and mountain. Thank you for acting im many of these priorities. Encourage her to continue exploring additional opportunities to tailor these rules. In the july letter as well as october 2018, letter to your agencies, several Banking Committee republicans and i urgent your agencies to reviews the book of rural french including using your discretion granted by congress to address the current Government Funds that brought definition. Off of your agencies have joined the fcc and to issue a proposal revising several aspects of the vocal brawl which is appreciated, the covered funds provision was left relatively untouched. I encourage your agency to take quick action to address the covered funds issue by revising the definitions over the right applications to the venture capital. Other longterm investments and loan creation. Separately im september, shortterm borrowing rates spiked as a result of large corporate stacked payment coming due in three and a billion dollars in treasuries ending the market. Even in live of Banks Holding a surplus of cash at the fed currently around 1. 4 trillion. In live of these events, banks, stepped into olivier the volatility in those markets by lending some of the excess cash that they hold events. So why didnt they do that. Some suggested that certain aspects of that supervision and regulations imposed after the 2008, financial crisis may have exact or rated this problem specifically the treatment of cash versus treasuries. Off of the fed is taken some steps to address the issue in shortterm by buying treasuries and buying funds, its important than fed review the details of his current regulatory and supervisory regime. For potential law turn fixes. Now quickly turning to guidance. The senators tillis produced rounds, kramer and i, went to the gao in february asking for his legal opinion as to weather three Federal Reserve news regulation letters, constitute brawl of the congressional review act. In its october response, gao concluded the two of the letters, including one providing a new supervision framework for large Financial Institutions, and another related to recovery planning our rules on the cra, and are required to be submitted to congress for purdue. During the Banking Committee news april and this very issue i urge your agencies to follow the cra and submit all rules to congress. Even if they have not gone through a formal notice and comment rulemaking. To continue providing more clarity about the applicability of guidance. I encouraged a federal banking regulators to take a more deliberate approach Going Forward and take any necessary steps to rectify informal guidance that is not been submitted to congress. In january 2019, the ncua announced that the portion of regulations that would be reviewed as a part of the process through which the agency reexamines all of these existing regulations every three years. The comment. For that review process has since closed now look forward to learning more about the regulatory recommendations provided to the mc and the roadmap fractions Going Forward. Finally, the Banking Committee has been exploring Digital Currencies. Over the past few congresses. And especially in live of the recently development of the libra Digital Currency started by facebook. In july i asked Federal Reserve chairman powell about his understanding and the feds in the project. Off of chairman powell noted that the fed has set up a working group to focus im libra and is in [applause] with other regulatory agencies, he also said that there has brought any one agency that can stay on up and oversight over this. Given its scope and relators across the globe, continue to evaluate libra. Its potential impact in the marketplace and consider appropriate necessary regulatory responses. It seems the Digital Currencies are inevitable. In the u. S. Needs to lead by providing clear rules of the road. During this hearing, i look forward to learning more about the scotus of addressing the overly broad, and definition of the vocal brawl, especially with rates back longterm investments. How the agencies are thinking through the recent turmoil and the market and what adjustments may be made for longterm fixed bread whether the supervisory banks currently need to be updated and better reflect the changes made in the tailoring rules. And how the agencies are thinking about the libra proje project, Digital Currencies including what the u. S. Regulatory framework in the u. S. , what the u. S. Framework merits consideration to balance innovation and protect users and privacy. I say each of you for your willingness to join the committee today. To discuss your agencies regulatory and supervise rate activities im these important issues. Senator brown. Thank you mr. Chairman. Welcome to the regulators here. I want to start by noting that typically join we have financial regulators testify the control of the currency is also here. Mr. Hunting had a conflict today. He is expected to announce changes to the Community Reinvestment act shortly. Changes in the Civil Rights Community and others are very concerned about and i share those concerns. I expect we will have him before this committee to talk with this proposal and other activities. We also how wall street financial scams hurt regular people im the blow up in bigger spaces like they did in 11 years ago. You all saw the devastation of the crisis. Whether your staff of the Senate Whether you are surfing at the agency and elite, or whether you are in a private equity firm after the treasury, you had a front row seat. You can argue art vote or discuss responsibility and you can talk about that later. As i am concerned about the collective amnesia you all appear to have as you make changes and make rules. Changes that allow wall street to go back to its old tricks. But i fear it will again, most americans are jobs in their homes and their life savings, and reap the kind of devastation in neighborhoods like mine in cleveland. The next time that complicated bets blow up in bigger spaces. But what is sometimes harder to see, are the kings that her families and the economy even join they work exactly the way wall street intended them to work. My scotus is setting up one of those wall street kings. Twelve years ago just before the financial crisis giant private can be firm, but a Nursing Home Company based in toledo, ohio. It operated facilities nationwide. So in Nursing Home Company was being strangled by debt from risky leverage loans. It laid off hundreds of staff and let his patients suffer on negligent horrifying conditions. According to the washington post, staffing has met there werent enough nurses to respond to patients. Health care Code Violations rose dramatically in pennsylvania and a patient broke her hip, crashed to the floor join a staffer join a single staffer tried to do a twoperson job to move her im her own. For his own. Fate patients face other leaving conditions that no human being should have to endure when he and clothing and dirty beds. Perhaps that was never going to come. And all of them while the wall street private equity firm was extracting more and more profits. Last you the Nursing Home Company went bankrupt. That it sucked the private equity firm for making huge profits im their investment. This what happens join leverage loans, and collateralized Loan Obligations and leveraged by work as designed, designed by wall street, wall street extracts the profits out of the companies and the rest of to his workers and patients and family and communities pay for it. Today wall street looks for profits anywhere can find them. These games squeeze her name out of every party of the economy. Not only healthcare, hospital and philip philadelphia, may be in ohio. But it is also manufactured Home Communities in iowa and i have seen some of those were private equity cayman and raise the brent 50 percent and people are captive. They have to live there and much higher brent that they didnt expect to manufacture hume communities New Hampshire also. Not just farming individual families but are communities. Imagine about it will be of these complex Financial Transactions blow up by the subprime mortgages did in 2008. This is just one of so many challenges working families face. Join weve god reported this week showing that half of almost half of American Workers are second lowwage jobs. One of four families spend more than half of their inhuman brent and utilities. I know people see about this economy but say of his tenure economy where growth is actually declined a bit in the last couple of years but say about that most half of American Workers are second lowwage jobs, one in four families spend more than half of their income and brent and utilities and you know that means if one thing goes bad in their lives, they lose their home 40 percent of americans are so short im cash if they are forced to borrow her name to cover 400. This of the people that you dont work for this present coming dont work for wall street, you dont work for the banks, you work in part for the half of the population they cant come up with 40 percent of the population that cant come up with 400. More more families have to borrow just get by im credit card debts and student loan debt, mortgage at all higher than before the crisis. Wall street squeezes more out of every one of their paychecks, adding to the brilliance. If regular americans are struggling, ten years into the socalled recovery, join the stock market is booming, what will happen join there is a recession. This cant be how the Financial System should work. The regulators job is to protect profits from big banks and big companies. It to protect our economy, and her Financial System and the ordinary families that the system is supposed to serve another way of other way around. I guess join the president , join candidate trump draining the swamp, he really meant that the train workers in giving wall street free reign as we seem, its beginning to happen. It means betraying workers and giving wall street free reign to pray im them and wring every last cent out of our communities. President uses his phony populism, racism, antisemitism and immigrants letter to divide us and distract us from the ways he and his handpicked cronies that betrayed working families and let them struggling more than ever. Its not how democracy should function. I am deeply worried that if u. S. Regulators dont stay on up for workers and their families so many in our communities and our economy and our democracy is at risk. Called out into our witnesses and ill ask you to give your remarks in the order i introduced you. Will torture you first. Thank you very much. Thank you for the opportunity to be here today. My colleagues and i join you im the cusp of the significant and shared milestone. Which is the full and faithful invalid notation of Congress News efforts to improve financial regulations. In the forum of the Economic Growth regulatory relief and Consumer Protection act would today briefly review the steps of taken towards this milestone, share information im the Banking System, and discuss the continuing needs to ensure our Regulatory Framework is coherent and effective. The act was an effort to consolidate and at work im financial reform. At a specific targeted response and the conditions facing todays banking organizations and customers. It was also rooted however, and longstanding congressional practice of reviewing the work done in the immediate aftermath crisis of addressing any gaps, and of ensuring the public and private resources towards the best and most efficient use. The board news latest supervision and regulation report which was delivered and tested in my test page eight confirms that we have a staple healthy and resilient making sector with robust capital liquidity positions and staple Loan Performance and strong loan growth, steady improvements and safety and soundness, in several areas of continued supervisory focus including operational resilience and cyber relatedness. The Banking System is substantially better prepared to manage unexpected things today than it was before the financial crisis. And now, join the waters are relatively calm, is the right time to examining the efficiencies and effectiveness of our protection against future storms. Blasters reform legislation, congress mayday significant down payment im that. In less than 18 months, we have implemented all of the major prep provisions pardon earlier this year we completed a cornerstone of the legislation, tailing our rules for regional banks. In building im our existing work that forms of greater risk, in the entire standards and reserve more scrutiny. We previously relied heavily im a firm news toll assets and a proxy for those risks, and for the cost of the Financial System would incur from sales. The simple asset was proxy was clear and critical and was rough and ready. It was neither risk sensitive nor complete. Are no rules employ a broader set of indicators to assess the need for greater supervisory scrutiny, and maintain the most stringent requirements of this oversight of the largest and most complex forms. We and our interagency colleagues have also worked in a range of measures to address the issues facing Smaller Banks with particular attention to the Community Bank community small. There through this in tenths regulatory activity has been to safely and implement congresses instructions but those instructions also speak to a broader need. In one central to our ongoing work just to enter our Regulatory Regime has brought only simple and efficient and transparent but also coherent and effective. Financial regulations, like any area policy, the product of history. Each component dates from a particular time and place, and it was designed and debated and acted to a particular set of needs. No rule can ever be truly done. Gaps in areas for improvement will always reveal themselves over time. Our responsibility is to address those gaps that went out creating new ones to understand fully the interaction among regulation, and to reduce complexity where that is possible and to ensure their entire rulebook supports the safety and stability and strength of the Financial System. My colleagues and i are paying particular attention to coherent center cavalry shape, and the full set of those crisis reforms. To smooth transition away from bible and other legacy benchmarks. In a sensible treatment of new Financial Products and technologies, and to clear consistent supervisory communication which reflects and reef enforces the regulations and law. My written testimony and the incoming supervisory report, each of these areas in greater detail that i appreciate the opportunity to discuss them with you today. Thank you. And i to answering your questions. Assuming you very much. Thank you for the opportunity to testify today. Eighteen months ago, i began surfing as the 21st chairman of the fdic. Knowing this. If the ic has undertaken amount of work with a particular country or are in bold. Strengthening the Banking System that continues to evolve. Ensuring that the surprise institution can meet the needs of consumers and businesses. And in fostering technology, solutions and encouraging innovation at Community Banks and the fdic. The fdic has making progress in each of the years areas i appreciate the opportunity to share our progress with this committee. For assessing the work to strengthen the Banking System, i would like to begin by providing context regarding the current state of the industry. The