Affordable internet so homework can be just homework. Cox, connect to compete. Cox, along with these other television providers, giving a frontrow seat to democracy. Next, testimony on oversight of the Banking System and the cryptocurrency market held in the wake of the recent collapse of the krips exchange f. T. X. Other topics include the impact of the economy on Banking Systems, lending in rural, native, and minority communities, and banking reform. This is two hours and 10 minutes. Senator brown the Senate Committee on banking, housing, urban affairs will come to order. Welcome to the witnesses and committee members. We know that most americans want the same things, a safe, affordable place to call home a good paying job. A strong stable government which they can trust. Our Democratic Institutions are only as strong as the people who empower them. Our economy works best when we have a free and fair democracy in which everyone can live lives with dignity for too long. Many of these dreams have felt out of reach. Working families struggle to pay for groceries to keep gas in their car to keep a roof over their heads. The cost of living and raising kids continues to rise. Democrats are listening and have delivered for the American People. We passed legislation to lower Prescription Drug costs. We help families stay in their homes during the height of the pandemic. We made investments in Public Transit in our nations infrastructure for the first time in generations. We focused on communities that our governments turned their back on, especially for instance, in my state that State Government now were tackling inflation by taking on Corporate Power and consolidation and reducing our dependence on foreign oil. We do that while creating good paying manufacturing jobs at home. These jobs making semiconductors, electric vehicles, solar panels or the jobs of the future. These jobs will go to americans because we pass the chips act, the inflation reduction act. The bipartisan infrastructure law was strong by america that senator portman and i worked on and we see results, our economy recovery, economic recovery has been strong over the past two years. Many americans have build up more in savings. Weve seen robust job growth for the first time in decades. Weve seen wage gains. Just last week, we began to see signs that inflation is starting to cool. Banks and Credit Unions are doing well. Thanks for the protections we put in place in doddfrank and because of the support that congress and regulators provided during the pandemic. Too many big corporations though have taken advantage of market concentration, jacking up consumer prices, earning higher and higher profits. My colleague senator reid has pointed out the biggest banks that benefit from higher Interest Rates today are not passing on those benefits to their customers. Again, penalizing americans who are trying to build up savings. Workers and Small Businesses already struggling under the weight of inflation shouldnt get hit with exorbitant bank fees, shouldnt lose their money on a cryptoscam, shouldnt have to worry that their savings will disappear overnight if a mismanaged bank or credit union fails. None of us want a scenario where risky bets on wall street crashed the economy again, thats why its so important. We have financial watchdogs like the four of you empowered to look out for main street, helping more americans hold on to hard earned money at a time when they need it. Most banking and credit union regulators or independent agencies that protect consumers, make sure banks and Credit Unions are safe and strong. Their independence, your independence matters. It makes for a more stable Financial System. Its essential for the entire economy. Our Witnesses Today all have decades of banking and credit union regulatory experience. They spent careers serving the public and protecting consumers, making sure banking and Credit Union Systems, making sure our banking and Credit Union System works for main street, not just for wall street. Thats exactly what they continue to do today. Theyre modernizing and strengthening an important civil rights law that will spur new investment in neighborhoods and communities that were left on their own. Thank you for that. Theyve taken a closer look at overdraft, nonsufficient funds and other gotcha fees that banks and Credit Unions to make sure customers are treated fairly at these fee programs dont raise safety and soundness concerns. Thank you for that. Theyre taking a fresh look at the bank merger approval process. So we dont continue this rubber stamp consolidation, which has big consequences for local communities. Too often big banks merge and close branches, leaving rural towns in urban communities without a bank. Theyre revisiting the Financial Systems safeguards that protect us from risks that big foreign at big foreign banks, making sure Bank Failures dont leave Taxpayers Holding the bag. Its important to remember the super Regional Banks of today are hundreds of billions of dollars larger than the largest banks that failed during the financial crisis. Our financial regulators know we need Strong Capital requirements so banks and Credit Unions can continue to lend and invest in communities in good times and bad. Theyre also overseeing the formation of new institutions that serve communities that often get left behind. Just last weekend, a new faithbased credit union fdic recently approved the First Mutual Bank in 50 years, which will pave the way from warren, ohio, and across the country, all the agencies are working together to foster new banks and Credit Unions and support the work at the same time, our regulators are looking out for risks on the horizon. The effects of Climate Change, the rise in Crypto Assets, the risk from shadow banks, the constant threat of cyber attacks. Theyre working with banking and Credit Union Industry to prepare for climate related risks and bolster cybersecurity protections. As criminals become more sophisticated in geopolitical threats increase. They stepped up to protect depositors and consumers when crypto firms mislead them into thinking their money is safe when it isnt. But we must stay vigilant, empower regulators with the tools to combat these growing risks, data breaches at banks and Credit Unions happen too often, threatening consumer Customer Data and exposing our Financial System to vulnerability. Thats why we need to pass the bipartisan improving cybersecurity of Credit Unions act led by senator ossoff and warrener warner. We need to make sure that banks and Credit Unions can partner with third parties in a way that allow banks to stay competitive without putting consumer money at risk. We cant let Big Tech Companies in risky, risky shadow banks play by different rules because of special loopholes. All these things will help strengthen our banking and Credit Union System for its core mission serving main street and workers and families. When workers have more power in the economy, they find better paying jobs. We have a stronger labor market that helps Credit Unions which added over five million new members over the past year. It drives down the number of households without a bank account, which dropped to record lows in 2021. When governments on the side of working families, more americans save money, more americans build wealth, more americans start Small Businesses. More americans participate in our economy. Our financial regulators have answered that call. Thank you for that. Ill continue to work with them to make sure our banking and Credit Union System works for everyone. Before i conclude my remarks, i want to thank the witnesses again for being here. Especially congratulate Marty Gruenberg in being nominated by President Biden to be chair of the fdic. Marty is well respected and seasoned regulator whos worked to protect consumers and preserve confidence in our Banking System. Played an instrumental role in helping implement many doddfrank reforms with his experienced leadership. I have no doubt that fdic can continue to address risks in our Financial System and increase access to Affordable Financial Services and ensure that banks honor their commitment to communities through the c. R. A. This committee looks forward to holding the nominations hearing in the next few weeks for marty and other fdic nominees center to me. Senator toomey. Senator toomey thank you, mr. Chairman. Welcome to our witnesses. Throughout this congress, ive warned about the politicization of the financial regulation. Some Bank Regulators are increasingly straying outside of their mandates into politically contentious issues. Take Global Warming. For instance, in september the fed announced a, quote, Pilot ClimateScenario Analysis exercise, end quote, with six of the largest u. S. Banks. Now were told that this is merely an exercise in ensuring that banks understand their risks. But the data, including the feds own research, shows theres no physical risk to banks from Severe Weather events. The only other risk is so called transition risk. We also know that banks are fully capable of pricing risks into their business decisions, including risks from changing customer preferences over time. So the real risk here is political. My worry is that an attempt to somehow quantify this Political Risk will eventually result in regulations designed to allocate capital away from carbon intensive companies. It appears some Bank Regulators are already committed to doing just that. For example, the fed, the fdic and the o. C. C. Have all joined the network for the greening of the Financial System. This is an International Group of financial regulators with the stated aim to, and i quote, mobilize mainstream finance to support the transition toward a sustainable economy, end quote. In other words, their goal is to allocate capital away from koosh carbon carbonemitting industries to those deemed to be sufficiently green. Let me emphasize the fed, the fdic and the c. C. C. Have all joined this group. The ncua has also warned that Credit Unions, and i quote, may need to consider adjustments to their fields of membership as well as the types of loan products they offer, end quote, and thats because of Global Warming. So heres the reality. Some unelected financial regulators want to accelerate the transition to a low Carbon Economy by misusing their powers to allocate capital away from Traditional Energy companies. But addressing Global Warming requires really difficult political decisions that involves tradeoffs and in a democratic society, these kinds of tradeoffs have to be made by elected and accountable representatives. Representatives of the American People who are held accountable through the political process. And i supported vice chairman barrs nomination despite a number of policy differences i have with him based in part on his commitment to stick to the feds narrow mandate at his confirmation hearing. Vice chairman barr stressed that the fed, and i quote, should not be in the business of telling Financial Institutions to lend to a particular sector or not to lend to a particular sector, end quote. I thank him again for that clarity and i urge him to keep to that commitment. And one way we could do that is by pulling the fed out of the politically contentious issue of Global Warming. Federal banking regulators have also been preoccupied in some cases with establishing new rules, the need for which have been dubious. For example, last month, the fed and the fdic proposed potential new requirements concerning the resolvability of Regional Banks. Now, this proposal seems to be predicated on the assumption that the only realistic option to resolve a Large Regional Bank would be to sell it to an even larger bank. But its not at all clear that that assumption is warranted or that new requirements are appropriate for Regional Banks for at least two reasons. First, the fed and the fdic have been approving Regional Bank resolution plans for nearly a decade, nowhere do those plans contemplate wholesale acquisition by larger banks. Second, Large Regional Banks have more than doubled their loss absorbing capital since the financial crisis and this dramatically improves their resiliency and dramatically decreases the likelihood that they would need to be resolved. Now, maybe some regulators seem to think that benefits of new regulations always outweigh the cost, but we know that regulation is not without cost and as regulation increases, financial activities will continue to migrate out of the Banking System as they have been doing in recent years. And while some of our banking regulators have been distracted, they failed to address real challenges facing the Financial System. For example, last year, the fed, the fdic and the o. C. C. Committed to providing greater clarity on the involvement of banks in cryptoactivities, such as providing Custody Services or issuing stable coins. Well over a year later, they still provided no public clarity. And during that same period weve seen several highprofile collapses of Crypto Companies, including a very prominent example just last week. I think its very possible that customers harmed by these collapses would have been better off if their cryptoassets had been Crypto Assets had been safeguarded by regulated banks that have been providing Custody Services for other kinds of assets for literally hundreds of years. But many banks have been pressured by you not to provide crypto related services until your agencies provide this clarity, which just hasnt been forthcoming. I will note however, that chairman harper seems not to have pursued this Pressure Campaign with Credit Unions. In fact, hes issued guidance for Credit Unions on partnering with Crypto Companies or using distributed ledger technologies. However, the ambivalence of the remaining agencies has helped to push crypto activities into foreign jurisdictions with weaker or no regulatory regimes. And as a general matter, it seems to me the failure of congress to pass legislation in the space and the failure of regulators to provide clear guidance has created ambiguity that has driven developers and entrepreneurs overseas, where regulations are often lax at best. One other item i want to highlight before we start the rest of the discussion and its the deteriorating liquidity in the u. S. Treasury market. In march of 2021, the fed committed to modify the supplementary leverage ratio or s. L. R. , in part to facilitate bank dealers ability to intermediate in this market. Over 18 months later, the fed still has not act. I understand vice chairman barr has only been in this role for four months and he has reasonably suggested that potential amendments to the s. L. R. Should be in the context of reviewing all Capital Requirements. I understand that but we really should recognize that a significant decline and treasury in treasury market liquidity is already occurring and absent and improvement, im afraid that the fed might one day decide it has to intervene by restarting bond purchases, which would be quite contrary to its Current Mission of getting inflation under control. What i hope ill hear from our banking regulators today is that they will prioritize these and other real challenges and not stray beyond their mandates into politically contentious issues or establish unnecessary new regulatory burdens. Thank you. Senator brown tha