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McHenry to Prudential Regulators: Instead of Lessening the Pain Our Constituents Are Feeling, You All Are Making the Situation Worse

Washington, November 16, 2022 -

Today, House Financial Services Committee is holding an oversight hearing with the prudential regulators, including Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, Michael Barr; acting Chair of the Federal Deposit Insurance Corporation, Martin Gruenberg; acting Comptroller of the Currency, Michael Hsu; and Chair of the National Credit Union Administration, Todd Harper.

Watch Republican Leader Patrick McHenry’s (NC-10) opening remarks here.

Read Republican Leader McHenry’s opening remarks as prepared for delivery:

“First, I want to thank the Chair for scheduling a hearing on FTX and its operations in the U.S. and abroad.

“We’ve coordinated to get this hearing on the books, and I look forward to working together to ensure we get the answers customers, market participants and the public deserve.

“There’s no sugarcoating the FTX collapse, it’s been a dumpster fire.

“FTX users have been left out to dry. The digital asset ecosystem is in limbo. And add to the mix an SEC Chair who is more interested in chasing headlines than bad actors. We are just starting to learn about the breadth and scope of what happened here.

“We’ll explore all of this at the upcoming hearing but let me say this: Congress must develop a clear regulatory framework for the digital asset ecosystem, including trading platforms.

“That is the best way to protect American consumers from phonies posing as prodigies.

“Turning to today’s hearing, thank you to our witnesses for being here.

“It’s been almost 18 months since the four of you—or anyone in your positions—have been before the committee.

 “It’s taken almost a year for someone to be confirmed as Vice Chair for Supervision. One of you is still in an “acting” role with no nominee in sight. And another one of you was just renominated after serving on an expired term for nearly four years. 

“That doesn’t inspire a lot of confidence.

“As the Fed fights Democrat-induced inflation with its two available blunt instruments—raising rates and quantitative tightening—you and your agencies can and should be helping customers and communities in the current economic environment.

“At the same time, the housing sector and treasury markets are becoming areas of real concern.  Liquidity in these markets, and specifically the role you all play, is something the new Republican majority will spend quite a bit of time unpacking.

“What worries me most is that instead of lessening the pain our constituents are feeling, you all are making the situation worse

“Here are just a few examples.

“First, Vice Chair Barr, over the last two years our nation’s banks have gone through a real-life stress test—and they proved their resiliency.

“Yet, you’ve suggested that the capital framework should be revisited and revised in such a way that would harm banks’ ability to promote economic growth and serve customers.

“Second, each of you has proposed changes to the Bank Merger Act and this has had a chilling effect on industry.

“That means less innovation and less competition in the marketplace.

“Acting Comptroller Hsu, you’ve taken a posture with respect to third party relationships that has had a negative impact on financial inclusion.

 “Prior to your arrival, the OCC made significant progress in harnessing financial technology to reach the unbanked and underbanked. Now, that progress has stalled.

“Today we’ll dig deeper into these and other concerns.

 “But let me make this clear, this conversation isn’t over.

“Republicans are onto your playbook: when you can’t legislate, you regulate. And when you can’t regulate, you pursue enforcement actions.

“I look forward to hearing from you all much more frequently next year.

“I yield back.”


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