Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, gave the following statement at a full Committee hearing entitled, “The Annual Report of the Financial Stability Oversight Council.”
Good morning, and welcome Secretary Yellen. Thank you for testifying today on the annual report of the Financial Stability Oversight Council, or FSOC.
Before the 2008 financial crisis, no governmental body was solely responsible for identifying and mitigating systemic risks across our financial system. As a result, our economy was unprepared for a near collapse of the financial system, which resulted in 8 million foreclosures, 9 million people unemployed, and the loss of $19 trillion in household wealth. In response, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and established FSOC to identify emerging vulnerabilities and mitigate threats to our financial stability. And for its first few years, FSOC took important steps to address turmoil in our financial system, including subjecting massive insurance companies, like AIG, to stricter oversight.
Unfortunately, the Trump Administration undermined FSOC by cutting staff, conducting fewer and shorter meetings, and removing regulatory safeguards on risky mega financial institutions.
The good news is that Secretary Yellen and FSOC are taking steps to repair the damage that was done by Trump and to focus on clear threats to our economy, including finally labeling climate change as a systemic risk. I urge the Secretary to also restore FSOC’s ability to guard against the threat of systemically important financial institutions.
Big Tech, crypto, and so-called shadow banks are also causing significant and fast changes in our economy, so FSOC must remain vigilant in this ever-changing environment.
Maintaining a strong economy has been a key goal of my Committee, particularly for communities of color. The 2008 foreclosure crisis was caused by banks steering borrowers, who were disproportionately people of color, into predatory mortgage products. History almost repeated itself during the pandemic as millions of families almost lost their homes to evictions through no fault of their own. I’m proud to have fought hard with my colleagues to secure $46.6 billion in emergency rental assistance, and I'm proud that by June, Treasury estimates that states and localities will have successfully spent or obligated all of those funds all across America.
But the housing market needs more support. Home prices rose nearly 19 percent in 2021, and despite the recent interest rate increases, prices remain high. Housing now accounts for a core part of inflation. It is clear that we must do more to increase our nation’s supply of affordable housing. This is why I drafted and continue to advocate for the historic housing provisions of the Build Back Better Act.
Finally, our economy can only be strong if everyone can participate and that includes America’s women. The Supreme Court’s forthcoming decision to overturn Roe v. Wade would threaten the financial security of women and our nation’s economic stability.
I applaud Secretary Yellen’s leadership thus far and look forward to her testimony.