JOHNSON STATEMENT ON WALL STREET REFORM OVERSIGHT HEARING
February 14, 2013
Johnson Statement on Wall Street Reform Oversight Hearing
WASHINGTON – Today, Senate Banking Committee Chairman Tim Johnson (D-SD) held a hearing titled “Wall Street Reform: Oversight of Financial Stability and Consumer and Investor Protections.” The Committee heard from representatives of the nation’s financial regulators and the Department of Treasury, and discussed the state of Wall Street Reform implementation.
Below is Chairman Johnson’s statement as prepared for delivery:
“The Committee is called to order.
“Before we begin, I would like to extend a warm welcome to Senator Crapo as Ranking Member and to Senator Manchin, Senator Warren, Senator Heitkamp, Senator Coburn and Senator Heller who are joining us this Congress. I’d also like to welcome back my friend Senator Kirk.
“Earlier this week I released my agenda for this Congress and I look forward to this Committee’s continued productivity. I am optimistic that we can work together on a bipartisan basis. To that end, Ranking Member Crapo and I sent a letter yesterday to the banking regulators on the importance of carefully implementing Basel III, and I look forward to hearing from each of you, and working with the Ranking Member, on this issue.
“Today, this Committee continues a top priority – oversight of Wall Street Reform implementation. Wall Street Reform was enacted to make the financial system more resilient, minimize risk of another financial crisis, better protect consumers from abusive financial practices, and ensure American taxpayers will never again be called upon to bail out a failing financial firm. This morning, we will hear from the regulators on how their agencies are carrying out these mandates of Wall Street Reform.
“Many of the law’s remaining rulemakings, like QRM and the Volcker Rule, require careful consideration of complex issues as well as interagency and international coordination. I appreciate your efforts to finalize these rules. To date, the regulators have proposed or finalized over three-fourths of the rules required by Wall Street Reform. These include rules that have recently gone "live" in the market, such as the data reporting and registration rules for derivatives that mark new oversight of a previously unregulated market. But there is still more work to do.
“That is why I have asked each of our witnesses to provide a progress report to the Committee – both on rulemakings that your agency has completed and those that your agency has yet to finalize. I ask that you craft these rules in a manner that is effective for smaller firms, like community banks, so they can continue to meet the needs of their customers and communities.
“The work does not end when the final rules go out the door. Regulators must enforce the rules, and I ask that each agency inform us how they intend to better supervise the financial system. While concerns have been raised about whether a few firms remain “too big to fail,” Wall Street Reform provides regulators with new tools to address the issue head on. This is one of the many reasons why full implementation of the law remains important, not just for our constituents, but for future generations.
“As we approach the five year anniversary of the failure of Bear Stearns, we must not lose sight of why we passed Wall Street Reform. Congress enacted the law in the wake of the most severe financial crisis in the lifetime of most Americans. How costly was it? I asked the GAO to study this question to better understand the impact the crisis had on our nation. In a report released today, which I am entering in the record, the GAO concluded that while the precise cost of the crisis is difficult to calculate, the total damage to the economy may be as high as $13 trillion. I say again, thirteen trillion dollars. Thus, I urge you to consider the benefits of avoiding another costly, devastating crisis as you continue implementing Wall Street Reform.
“I would like to make one final comment on Director Cordray and the CFPB. Since he was appointed as the head of the CFPB last year, Director Cordray and the CFPB have worked tirelessly to finalize many rules and policies to protect consumers in areas such as mortgages, student lending, servicemembers’ rights, and credit cards. He has done good work, and I urge my colleagues to confirm Director Cordray to a full term without delay and allow the CFPB to continue its important work protecting consumers.
“I now turn to Ranking Member Crapo.”