Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, gave the following opening statement a full Committee hearing on the safety, soundness and accountability of financial institutions with Rodney Hood, Chairman of the National Credit Union Administration (NCUA); Jelena McWilliams, Chairman of the Federal Deposit Insurance Corporation (FDIC); Joseph Otting, Comptroller of the Office of the Comptroller of the Currency (OCC); and Randal Quarles, Vice Chairman of Supervision, Board of Governors of the Federal Reserve System.
As Prepared for Delivery
Today this Committee convenes for a hearing with our nation’s prudential regulators.
Last month, we held a hearing with the CEOs of seven of our nation’s largest banks. In March, we held a hearing specifically focused on Wells Fargo and its pattern of harming its customers. Now we have with us today the regulators responsible for overseeing those institutions as well as other financial institutions.
For some time, I have voiced concerns that the fines levied by our regulators against megabanks that break the law ultimately just amount to the cost of doing business for these institutions, and do not effectively lead them to change their behavior. In the last ten years, the U.S. Global Systemically Important Banks (GSIBs) have collectively paid at least $163.7 billion in fines for consumer abuses and other violations of the law. Over the same period, they made $780 billion in profits.
In the last decade, Wells Fargo alone paid more than $11 billion in fines, but has raked in over $197 billion in profits. This institution has been engaged in widespread consumer abuses, including the creation of millions of fraudulent, unauthorized accounts. While Wells Fargo remains under an asset cap imposed by the Federal Reserve and has recently been publicly rebuked in statements by regulators, these steps do not appear to have gone far enough. Today, Vice Chairman Quarles, Comptroller Otting and Chairman McWilliams must describe what additional steps they are prepared to take to rein in abusive megabanks like Wells Fargo.
I am also very concerned that the Federal Reserve, OCC and FDIC have proposed weakening capital, stress testing, and other requirements for the largest financial institutions, and appear to be kowtowing to Trump’s harmful deregulatory agenda, checking items off of the to-do list provided by Trump’s Treasury Department in a series of reports they have released. I want our witnesses to know that Congress is paying careful attention to your actions, and we will not tolerate actions that threaten the stability of our financial system.
Additionally, in the wake of the passage of S.2155 last Congress, bank consolidation is accelerating as I previously warned it would. The proposed BB&T and SunTrust merger would create the sixth largest bank in the United States. But while thousands of banks have proposed to merge between 2006 and 2017, not a single bank merger application was formally rejected by the Federal Reserve. Bank mergers should not simply be rubber stamped by regulators; they should provide a clear public benefit for the communities the banks serve.
That is why I have called for additional public hearings in states that would be affected by the proposed merger, as well as for regulators to defer a decision on the merger until this Committee has an opportunity to thoroughly review the matter. I look forward to discussing these and other matters with our witnesses today.