Chairman Sarbanes, Ranking Member Gramm, and members of the Committee, it is a great pleasure for me to appear before you today. I am humbled that President Bush has nominated me to chair the Federal Deposit Insurance Corporation. If I am confirmed by the U.S. Senate, I give to you my solemn pledge to work closely with all Members of this Committee and the other financial institutions regulatory agencies to maintain stability and public confidence in the Nation's banking and thrift systems.
While I am a newcomer to Washington, D.C., I am no stranger to the banking industry. For the past three decades, I have been involved in virtually every aspect of the banking business. In the early 1960s, I started out as a loan officer at a small savings and loan in the Texas panhandle, and I eventually became President and Chief Executive of the First National Bank of Amarillo. During the severe economic downturn of the late 1980s, I led the difficult but ultimately successful efforts to revive First National Bank. Indeed, by 1993, the restoration was complete and I take great pride in the fact that our successful turnaround was recognized not only by our community and shareholders, but also by our federal regulators.
Being nominated to this position has great personal significance for me. As a longtime banker and a life-long resident of Amarillo, I understand how important a strong and committed bank is to the citizens of our nation's communities. When we were faced with the challenges of restoring the First National Bank to financial health, I well understood the severe adverse consequences that failure would have brought to all segments of our local community. In short, it is from personal experience that I can speak directly to the importance of our nation's insured banks and thrifts-- they are the financial lifelines for all the citizens of all our nation's communities.
Our nation's banking system today is the envy of the world. It is vibrant. It is innovative. And it is now strong and secure. We have the most professional regulatory and supervisory system in the world. But globalization of financial services, innovative technologies, and legislatively expanded powers and authorities have changed banking dramatically and forever. These changes will continue, and they require us to deal with issues our predecessors could not have dreamed of. I am confidant that with its staff of highly qualified and dedicated professionals, the FDIC is well equipped to respond to these challenging and ever-accelerating developments.
In assessing the impact of recent developments on the financial institutions industry, I am reminded of the immensely difficult challenges the FDIC has faced and surmounted in the nearly seven decades since its establishment in the midst of the Great Depression. Undoubtedly, as the financial markets evolve, unanticipated policy questions and developments will continue to arise. In the past, I know that the FDIC encouraged extensive and rigorous debate in addressing the difficult issues of the day. And it is with the same spirit of open debate and discussion that I intend to approach the many challenging new issues currently on the Agency's agenda, including the appropriateness of any structural reform of the overall deposit insurance program.
Let me shift gears for a moment and discuss briefly several issues that I know are of great interest to the members of the Committee, your constituents, and the financial institutions industry, as expressed to me by Senators these past few weeks, namely the Community Reinvestment Act, "predatory" lending and privacy.
The Community Reinvestment Act has been the law of the land since 1977. And the Federal Reserve Board recently found that the CRA has contributed to the financial health of our nation's communities by bringing credit to localities that, in the past, have been under-served. As a banker, I also well understand the significant challenges all insured financial institutions face in complying with the rigorous requirements of the CRA. As you may know, the regulatory agencies, including the FDIC, are about to embark on an extensive review of the CRA regulations. I am anxious to be part of this process and to learn more from all interested parties, including bankers and community groups, whether any changes are needed to make the CRA more effective. I also look forward to exploring with the staff of the FDIC and the other agencies how the changes made to the CRA by Gramm-Leach-Bliley have affected insured financial institutions and the communities they serve.
Another issue about which I share the Committee's deep concern involves financial institutions engaging in what generally has been referred to as "predatory" lending or "predatory" pricing. From my perspective as a professional banker, I can say that the application and enforcement of normal bank underwriting guidelines can go a long way towards eliminating this practice. I look forward to working with the FDIC staff and other agencies to determine how we might effectively bring an end to this abusive practice.
Finally, with the explosion of personal information maintained on individuals coupled with the growth of the computerized storage of such information, I recognize that privacy is becoming a critical issue for many consumers. As you know, for the first time, Gramm-Leach-Bliley imposed a set of privacy guidelines on financial institutions. I look forward to observing how well these provisions are working in practice. After time, if necessary, I will apprise the Committee of the necessity and appropriateness of any statutory enhancement to existing protections.
Chairman Sarbanes, Ranking Member Gramm, and Members of the Committee, obviously I have just touched upon a few of the most important issues facing the FDIC. Let me assure you that, in addressing this formidable array of legislative and regulatory challenges, I will never lose sight of what I view to be the central mission of the FDIC: protecting depositors, ensuring the safety, soundness, and financial integrity of America's banks and thrifts as well as the ready availability of the essential financial services provided by these institutions to all Americans.
Thank you for inviting me to appear before you today. I look forward to working with the Committee in the future.
I would be pleased to respond to your questions and concerns.
Home | Menu | Links | Info | Chairman's Page