McHenry to Prudential Regulators: The Era of Post-Financial Crisis Regulation is Over
Washington,
November 20, 2024 -
Today, the House Financial Services Committee, led by Chairman Patrick McHenry (NC-10), is holding a hearing to conduct oversight of President Biden’s prudential banking regulators.
Republicans are holding Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg accountable for his continued efforts to stonewall Congressional oversight amid a staff report confirming allegations of a toxic workplace culture at the agency under his watch. Members will also closely scrutinize other partisan regulatory initiatives pushed by President Biden’s federal banking regulators including the disastrous Basel III Endgame proposal.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as prepared for delivery:
“The era of post-financial crisis regulation is over.
“For the past decade, your agencies have worked to push credit risk out of the banking system.
“At the same time, you completely missed the interest rate risks on bank balance sheets. This led to three of the largest bank failures in American history last year.
“Time and again, your agencies have also worked to stifle the beneficial role that innovation and technology play in our financial system.
“It’s clear our banking regulators, under Democrat leadership, have been busy fighting the last war.
“Your backward-looking approach to regulation has harmed our financial system, innovation, and consumers.
“In contrast, the House overwhelmingly voted to reject your approach and embrace our inevitable technology-based future by passing FIT21.
“Our digital asset market structure bill represents the largest rewrite of financial regulatory law since Dodd-Frank, and more than 71 Democratic Members supported the legislation.
“I repeat: the most extensive rewrite of financial regulation since Dodd-Frank passed with overwhelming bipartisan support.
“We need new, technology-based solutions that strengthen our financial system, help consumers, and make our regulators more efficient.
“Instead of working with Congress to identify these solutions, your agencies have proposed a regulatory onslaught amounting to a sweeping rewrite of the rules governing U.S. financial institutions.
“These proposals frequently included inadequate economic analysis, weak justification, and limited public engagement.
“Your power grabs not only harm consumers and our financial system, but they also erode the credibility of your historically independent agencies.
“First, the Biden Administration’s politicized, partisan regulatory agenda has destroyed your agencies’ credibility with Congress.
“By skirting Congressional oversight and ignoring the will of the people’s representatives, you have eliminated the trust in your agencies to act independent of politics.
“Second, your overreaching rulemakings diminish your credibility with the courts.
“Even after the Supreme Court’s decision in West Virginia v. EPA, this administration’s regulators are pushing new rules with paltry—and sometimes non-existent—statutory justification.
“Third, the American people have lost trust in our regulators’ ability to act in their best interest.
“This administration’s regulators have repeatedly advanced rules that reduce access and increase costs of the financial products used by everyday Americans.
“Because of your actions, the political independence and authority of your agencies is in danger of being reduced, whether it’s by Congress, the President, or the courts.
“I’m sure my colleagues across the aisle will disagree, so I’ll close by running through the facts:
“The OCC has been led by an acting head for all four years of the Biden Administration. Yet, Mr. Hsu, you have gone along with every politicized initiative put forward.
“Vice Chair Barr, your headline proposal—Basel III Endgame—was rejected by your colleagues and the public. Meanwhile, all three banks that failed last year were under Fed supervision.
“Chair Gruenberg, you’re in a league of your own. Your failed leadership of the FDIC will result in a total overhaul of the agency in the coming years.
“Resigning in January is too little, too late. That’s why Republicans introduced a resolution calling for your immediate termination.
“Chairman Harper, thanks for being here.
“As I said, the era of post-financial crisis regulation is over. This administration’s regulators failed to see it. And unfortunately, for you all, it’s too late to right the ship.”
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