Today, Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, gave the following statement at a full committee hearing on the Federal Reserve’s supervision and regulation of the financial system with Randal Quarles, Vice Chairman for Supervision, Board of Governors of the Federal Reserve System.
As Prepared for Delivery
Thank you, Mr. Chairman, and welcome, Vice Chairman Quarles.
I look forward to hearing Vice Chairman Quarles’ testimony today on the Federal Reserve’s bank supervision and enforcement activities. I want to point out that the position of Vice Chairman of Supervision was created following the financial crisis as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as one of several steps to address the Fed’s insufficient supervision and enforcement leading into the crisis. Vice Chairman Quarles is in fact the first person to officially hold this important role that is critical in keeping our financial system safe and sound.
I was encouraged when the Fed took action under then-Chair Janet Yellen and initiated a strong enforcement action against Wells Fargo for its egregious consumer abuses and capped the bank’s growth until it cleans up its act. Of particular significance is the fact that this enforcement action is not just a fine, but comes attached with real consequences for Wells Fargo, which is a repeat offender with a terrible track record of harming consumers, including by opening up millions of fraudulent accounts without their customers’ consent.
I hope to see the Fed continue to strongly use its enforcement tools. We need our independent regulators to be vigilant in carrying out their statutory duties, and make robust use of their authorities to crack down on bad actors.
Sadly, that independence is under attack. Just last week, Office of Management and Budget Director Mick Mulvaney, who was unlawfully appointed by President Trump to serve as Acting Director of the Consumer Financial Protection Bureau, testified before this Committee. Since Mr. Mulvaney’s illegal appointment, there have been zero enforcement actions by the Consumer Bureau. And he has taken a series of actions to weaken the agency’s ability to carry out its important mission and benefit the predatory actors that the agency is designed to police.
Indeed, the Trump Administration and my colleagues across the aisle are working to move our system of banking regulation in exactly the wrong direction in their efforts to dismantle the crucial reforms that Democrats put in place in Dodd-Frank.
These efforts at deregulation come at a time of record bank profits for banks of all sizes. But even though the banks are making money hand over fist, this President and Republicans in Congress are pushing hard to help out the nation’s largest banks. Nearly every week, Republicans push through harmful legislation that undermines Dodd-Frank.
I am also very concerned by the recent proposal from the Fed that would lower the capital buffer at the eight largest banks by a combined $121 billion. Under this proposal, Wells Fargo, for example, would be allowed to hold $20 billion less in capital than the current standard for a well-capitalized bank of its size.
I look forward to discussing these and other important issues with Vice Chairman Quarles here today.
Thank you and I yield back the balance of my time.