Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, delivered the following opening statement at a full Committee hearing entitled, “Promoting Financial Stability? Reviewing the Administration’s Deregulatory Approach to Financial Stability."
As Prepared for Delivery
Welcome back, Secretary Mnuchin.
Today we are here to discuss the Trump Administration’s actions that have undermined, and not promoted, our nation’s financial stability.
As I have said many times before, I am very concerned about this Administration’s actions to eliminate important protections for consumers, investors and our economy. It appears that our banking regulators are following the deregulatory blueprint that the Treasury Department under Secretary Mnuchin’s leadership has mapped out point by point, and rolling back many of the critical reforms Democrats made to prevent another financial crisis. If these rollbacks continue, there will be grave consequences for financial stability and our economy.
The 2008 financial crisis was devastating for our nation. 11 million Americans lost their homes, $13 trillion in wealth was lost, and nearly 9 million Americans lost their jobs. As Chairwoman of this Committee, I am committed to doing everything that I can to ensure that we do not repeat the mistakes of the past as I’ve now seen twice how the road of deregulation leads to financial crises.
The focus of this hearing is the Financial Stability Oversight Council, or FSOC. We created FSOC as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act to eliminate regulatory gaps and to ensure the government could identify and mitigate risks to our economy.
After the financial crisis, FSOC designated several large nonbank financial companies for enhanced oversight, including AIG, the well-known poster child for the financial crisis. Under the Trump Administration, however, FSOC ceased supervision of all of these nonbanks, and advanced an activities-based approach that amounts to more deregulation, willfully ignoring how catastrophic the failure of a large financial institution would be for the financial system and economy.
The Trump Administration has also cut FSOC’s budget and reduced its staff by half. It has also reduced the budget and staff of the Office of Financial Research (OFR), which collects data and conducts research and analysis to aid FSOC in its important work. Along the way, the Trump Administration has fleeced American taxpayers with their tax scam, which contained more big giveaways to the nation’s largest banks.
All of these steps put Wall Street’s bottom line first and Main Street back at risk. And make no mistake, the risks are growing. Climate change, cybersecurity, leveraged lending, hedge funds, and the rapid emergence of big tech in the financial system led by Facebook are all concerns that must be taken seriously.
Today, Secretary Mnuchin will once again be asked to explain the harmful actions of the Trump Administration to the American public.