Statement. Ill be real quick today. I just want to say i wont be here. Ive got to preside over a appropriation hearing. But i believe that president has sent us two goodnominees. I hope the hearing goes well and we can expedite the nominees and get them in place. Thank you. Thank you,senator shelby. All right. The hearing will come to order. This morning well consider the nominations of mr. Joseph otting to be comptroller of the currency and randal quarrels to be a member of the board of governors of the Federal Reserve system and vice chairman for supervision of the board of governors of the Federal Reserve system. Welcome to both of you. Thank you. And congratulations to you on your nominations to the important offices. I see that you have friends and family sitting with you. I welcome them heretoday as well. These two positions are critically important to ensuring a safe, sound, and vibrant Financial System. Were fortunate to have two highly qualified individuals to consider for these posts. Mr. Otting bringing a particular expertise and understanding of our banking from a long career in Financial Services. As head of the occ mr. Otting would oversee supervision of all National Bank ands federal savings associations as well as federal branches and agencies of foreign banks. Having served in the lead positions at various institutions in the past, im confident that mr. Otting will bring strong leadership to the occ. Mr. Quarrels has a wealth of government andprivate sector experience as well dealing with both domestic and International Financial markets. He is no stranger to Public Service having previously served in multiple top posts in the Treasury Department. As vice chairman for supervision, mr. Quarrels would play a key role in developing regulatory and supervisory policy for the Federal Reserve system. President obama never designated anyone for 24 role. Insteld, former fed governor acted as the de facto vice chairman for supervisionin various ways. Including by chairing the Federal ReserveBoards Committee on supervision and regulation, overseeing the Large InstitutionSupervision Coordinating Committee and representing the fed at the Financial Stability board and in basul among other functions. Chair yellen committed in a hearing she expected President Trumps nominee for vice chairman for supervision will have the same responsibilities that the governor had including heading the Federal Reserves committee on supervision and regulation and representing the fed at the Financial Stability board and in basul. I look forward to working with mr. Quarrels in thiseffort. Congratulations again on your nominations. Thank you and your families for your willingness to serve. Senator brown . Thank you,mr. Chairman. And welcome to the witnesses. I thank the witnesses for their willingness to enter Public Service. This committee under the previous chairman, not the gentleman who i respect sitting next to me waited two years, i never did hearings on two Federal Reserve nominees. Im glad this chairman and the democrats are willing to move forward on a nominee of the president of the party that is not ours unlike what this body this committee failed to do for two long years. Youre seeking all of you the two of you are seeking tofollow in the footstep two of people, each at the fed and occ who are dedicated Public Servants and did a great deal to make our Financial System safer. Mr. Quarrels served as treasurys undersecretary for domestic finance in the years leading up to the 2008 financial crisis, his job was to coordinate oversight of the financial industry and ensure Government Watch dogs were looking out for the best interests of american taxpayers. However, many his statements leading up to the crisis lead me to wonder whether he was asleep at the switch or willfully turning a blind eye to wall street abuses and excesses. Contrary to the predictions in 2006, the economy was not strong. The Financial Sector was healthy and our future was not as he said, bright. The banks were not well capitalized and tax bares paid billions to bail the banks out and mr. Quarrels and his company turned a profit off ofthe crisis. Exotic mortgage products were not confined to as he said, upper income individuals thatcan manage a sizable increase in their monthly mortgage payment. Shady loans were pitched tosheet metalworkers in ohio, School Teachers incleveland, ohio, Service Members from Wright Patterson air force base in dayton, ohio. The financial crisis devastated the ohio families thatlost their jobs, homes, and savings. But for wealthybank executives and investors, the crisis was hardly life changing. It was an opportunity toprofit by flipping failing banks bought at rock bottom prices and foreclosing on working families. All while raking in taxpayer dollars. I said this committee before, we live in 44105 in cleveland and 2007 the first half of that year more home were foreclosed on than any zip code in the United States of america. So i see the aftermath of that every day im in ohio which is four or five daysalmost every week. Mr. Ottings bank made money you about kicking seniors out of their homes andthen turned around and said the government made them do it. Mr. Quarrels bemoaned the roolle of the government as a player in the Financial Sector rather than a referee. These sent. Would ring a little less hollow had their banks not accepted 2. 5 billion from fdic to protect them from losses. Parentally they believe in government help for wall street just not families and zip code 44105. In the wakest crisis, the fdic was forced to step in to sharelosz at failed banks, banks like indy mac and bank united to prevent a bigger hit on the insurance fund. Mr. Quarrels and mr. Otting then stepped in and made good money after those banks had been propped up by taxpayers. According to the columbus dispatch, the most conservative newspaper, 2,000 ohioans were foreclosed on in onewest, our six largest counties alone from 2009 to 2015 while mr. Otting was the ceo. He was accountable for robo signings by the office ofthrift supervision and he now hopes to run that company. My concern is not whether todays nominees have a wealth of experience. They do. Whether theyll work for american taxpayers and working families. We made a lot prove gres inthe seven years since we passed wall street reform. One fifth of the rules, however, remain unfinished. Instead of finishing the job, wall streets allies andthis town try to take us backward. Weakening or eliminating important safeguards. We already see this in some of the agency thats removed wall street reform from their agenda. And tacked other agendas and other agencies for doing their jobs. They claim theyre besieged bytheir overseered, the regulators. The banks refrain as to be expected. What is not acceptable is the referees to join the chorus. Look forward to hearing from our witnesses. We will the nominees rise and raise your right handsand well administer the oath. Do you swear or affirm that the testimony you are about to give is the truth, the whole truth and nothing but the truth so help you god . I do. I do. And then secondly, do you agree to appear and testify before any duelly constituted committee of the senate . I do. I do. Thank you. Take your seats. I think youve been advised. We allocate you five minutes for an interductry oral statement. I again remind my colleagues on the committee that the time for questioning is five minutes. Before you begin your statement, i invite you if you would like to so to introduce any Family Member who are in attendance plchlt otting, you may proceed. Thank you very much, chairman. I would like to introduce my wife and best friend bonnie otting who is sitting behind me. Sometimes you get lucky in life and im forever grateful the day we had the opportunity to meet. She has always been my compass in life and for that i love you. I would like to recognize bonnies father who could not be with us today due to his health and age of 94. Herm san a first generation immigrant who came to the unitedstates to pursue the American Dream so his family could live a better life. One of his proudest moments is when he was granted his u. S. Citizenship. My mother grace ann otting is with us today also. She has been my Guiding Light in life and instilling inme a strong moral compass and helping me appreciate the values of sound family life. She taught school for 35 years and was an inspiration to many students. I would like to acknowledge my late father. My father taught me valuable lessons in life not the least of which is Business Ethics and commitment to serving his community. I learned the value of kindness to others and love can solvemany things. Lastly, i would like toinlt introduce my sister and brother who are also with us to day. Over the years we have learned the value of love, companionship and the ability to be dependent on each other. Thank you very much. Thank you. Again, welcome to your family. You may begin yourstatement. Chairman, Ranking Member and members of the committee, it is an honor to appearbefore you today. I am grateful to be nominated by President Trump to be the comptroller of thecurrency and if confirmed for this role id be honored to serve the citizens of United States ofamerica. Thank you to all the Committee Members i had an opportunity to meet. I enjoyed the opportunity to meet some of you for first time and to get reacquainted with others. But most importantly, i appreciate the opportunity to learn more about the issues you feel are important to thepeople of america. For those who i did not get to meet, if confirmed, i look forward to meeting and working with you in the future. I grew up in a midwestern family where my father was an entrepreneurial business person and my mother as i indicated was a schoolteacher. At the young age of 10, i learned the value of business, client relationships and leadership for my father while working at his businesses, often doing the job thatage that nobody elimination wanted to do. I also observed how my father, how hard work, willingness to take risk and Family Support led to success. I learned from my mother who taught school during the day, raised three children and went to college at night that hard work and dedication can make a difference. I studied at the university of Northern Iowa following a Family Tradition of my mother, sister and ultimately my brother to the university. During holiday brakes, i would work at my fathers businesses and including working at an electrical dam, a commercial construction and at a bakery. All great roles for building character and appreciation for people and individuality at how leadership can make a difference. After college, i was fortunate to be chosen to be part of bank of americas Training Program in california. It was an experience that forever changed my life. I gained insight into the Banking System from the other side of the table and discovered how banks can help consumers and businesses go to services of others. The importance of serving employees, the community, customers and shareholders. My banking experiences allowed me to work for one of the largest banks in the United States, two well respected Regional Banks and a Community Bank. I touched virtually every segment of the industry including is serving consumers,businesses, trust functions, private banking, investment services, human resources, compliance, audit, treasury, financial manage ment andoperations. This experience provides a broad base of knowledge that would be helpful and insightful if i was chosen to be the comptroller. In 2010 i decided to leave an executive position at an established Financial Institution because i felt Southern California was in need of a Hometown Bank. When i approached about the idea, i knew it would be challenging and a tremendous amount of work but ultimately an achievement for myself and the company. With the assistance of many dedicated men and women of one west bank, we were able to create the largest Hometown Bank in Southern California. I was able to grow beyond being just a Mortgage Company and being able to serve the needs of local businesses, families and consumers. Hopefully helping build this company is something that i will and will remain proud of. After successful merger in 2015, i left the organizationand became an entrepreneurial person returning to my roots in real estate and Small Business. The mission of the occ is to ensure that National Banks, federal savings and loans and foreign operations of interNational Banks operate in a safe and sound manner, provide fair access to Financial Services, treat customers fairly, and comply with applicable laws and regulations. If confirmed as the omptroller of the currency and given an opportunity to lead the men and women of the agency, i pledge to occs mission andwork with the committee and all members of congress. Thank you for your time today. I look forward to answering the questions the committee may have and im honored to share this hearing with mr. Quarrels. Thank you mr. Otting. Mr. Quarrels, you may begin. Thank you, mr. Chairman. Id like to introduce mywife, hope who is with me today. My parents ralph and beverly quarrels and our niece liza burnett who is interning on the hill. Thank you. We welcome your family. My statement . Yes, please go forward. Chairman crapo, Ranking Member brown, members of the committee, thank you for this opportunity to appear before you today. I am honored that president is nominated me to serve as a member of the board of governors of the Federal Reserve system and as the boards vice chairman for supervision. And im grateful for the privilege of your consideration. Im also very grateful for the support not only of my wife and family who are here but of our three children randy, spencer hope. And they have put up with a lot in their lives from their fathers Public Service. The federal resevenrve system occupies a position in ourgovernment for a Strong Economy and the stability of the Financial System and supporting robust job growth and a context to price stability. I can assure the committee that were i to be confirmed, i would be strongly committed to allthe objectives. The specific position for which ive been nominated has a particular role in ensuring the safety, soundness and efficient operation ofthe Financial System. As recognized by the recent report, regulatory policies that have been enacted since the financial crisis haveimproved the safety and soundness of the system. But as with any complex undertaking, after the first wave of reform with the benefit of experience and reflection, some refinements will be in order. One of the principle architects said as much him snefl a speech he gave in april on the occasion of his leaving the board. Stating that there are clearly some change thats can be made without endangering Financial Stability. The key question censuring that as we continue to refine the system over time, we do so while maintaining the robustresilience of the system. I believe that im well qualified to undertake that role as this committee knows, ive had experience over my career with the Financial Sector from many different points of view. Ive been a practicing lawyer, versed in thegranular technicalities of the most complex aspects of the regulatory system, at the other end of the spectrum, ive been investor in Small Community banks and familiar with the particular benefits and challenges that those institutions face. And ive been a financial regulatory policymaker under two different president s in two different decades. In fact, my first tour of duty in Public Service was during a similar period of response after financial crisis arriving in 1991 during the cleanup phase of the savings and loan crisis and facing the insol ven sieve the fdics insurance fund. While this experience has given me subinstantive insight into the issues that federalreserves vice chairman for supervision will face, it has also reinforced my commitment to what i think is the single most important characteristic of a good policymaker, that he be humble. Humble about the constraints on our understanding of complexsystems, humble about the fallibility of ou