Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, gave the following statement at a full Committee virtual hearing entitled, “Oversight of Prudential Regulators: Ensuring the Safety, Soundness, Diversity, and Accountability of Depository Institutions.”
Welcome, Chairman Harper and Acting Comptroller Hsu, and welcome back Chairman McWilliams and Vice Chairman Quarles.
A major focus of this Committee continues to be the economic impacts of the COVID-19 pandemic crisis. Today, I expect to hear from our witnesses about what their agencies are doing to respond to this ongoing crisis, and what they are doing to make sure that banks and credit unions are not further harming consumers, especially people of color, who are already facing challenges through no fault of their own as a result of the pandemic, and that those institutions are instead helping consumers and supporting the recovery of communities and people of color whenever possible.
I have long been critical of the long list of harmful deregulatory actions taken by the last Administration’s appointees, and particularly their actions to roll back key Dodd-Frank reforms and other consumer protections. So, I am pleased that the Senate has taken bipartisan action to reverse the OCC’s harmful so-called “true lender” rule that would allow nonbank lenders to skirt state interest rate protections, and I have called on House leadership to take up that Congressional Review Act resolution as soon as possible. I am also pleased that the Biden Administration’s appointees are bringing a better approach to regulation that prioritizes consumers, and that regulators are starting to take steps to protect the financial stability of our system against climate risks and other threats.
Vice Chair Quarles, I am alarmed by reports the Fed is planning to weaken its bank merger review process, one that already amounts to a rubber-stamping process. Additionally, Fed Governor Brainard has expressed concerns about concentration in the $250 to $700 billion asset size category, and I would note this should not be surprising given the various rollbacks we’ve seen on large bank capital, liquidity, and other safeguards. Regulators must reverse course immediately to promote financial stability.
So, I look forward to hearing about what prudential regulators are doing about banking deserts where bank branches have closed, leaving communities with less access to traditional banking services. I was pleased to learn that the OCC, under Acting Comptroller Hsu’s leadership, announced yesterday that they are reconsidering Joseph Otting’s harmful Community Reinvestment Act rule. Modern-day redlining has left communities of color with limited access to much needed financial services, so policymakers must act with urgency to address these issues.
I am also eager to hear from our panel regarding their agencies’ efforts on diversity and inclusion in the banking sector, including their work to support minority depository institutions and community development financial institutions during this pandemic.
Lastly, I want to make clear that temporary regulatory exemptions or delays for banks that were put in place for the pandemic must come to an end and be allowed to expire. The previous administration attempted to use the pandemic as a cover to delay or weaken key financial safeguards and regulations, and those efforts must not be allowed to stand.
So, I want to thank you, and I look forward to the testimony of all of our witnesses.