January 30, 2018

Brown Opening Statement At Banking Committee Hearing On The Financial Stability Oversight Council

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – released the following opening statement at today’s hearing on “The Financial Stability Oversight Council (FSOC) Annual Report to Congress.”


Sen. Brown’s remarks, as prepared for delivery, follow:

Thank you, Mr. Chairman, and thank you Secretary Mnuchin for appearing before the Committee today.

I look forward to your testimony on the threats to financial stability. The economy has grown steadily for the past eight years, in large part because of the hard-earned progress of the Obama Administration.  Unemployment has fallen, and some – but certainly not all – families have recovered from the financial crisis.

We’ve made some progress, but we still have some pretty substantial challenges to financial stability in this country.

Personal savings rates have been falling for years and now stand at only 2.4 percent, the lowest since September 2005. Household debt continues to climb. Job growth in 2017 was OK, but below the levels of 2011, 2012, 2013, 2014, 2015, and 2016.

Three million Americans lost their health insurance last year, the largest jump since Gallup started tracking coverage a decade ago. And for the second year in a row, life expectancy for Americans actually fell – driven in large part by an opioid epidemic that’s been ignored by too many in Washington.

Stock markets around the world have been on a tear, which certainly helps the top fifth of Americans. By one estimate, these are the people who own 92 percent of stocks in the U.S.

It’s good for workers with a 401(k), but too few workers have even that much retirement security – only a third of workers are making contributions to a 401(k) or similar retirement plan.

While the President likes to take credit for what he labeled an ugly bubble a little over a year ago, it will be interesting to see if he is as eager to take credit for a down market.

Most workers build wealth with a hard-earned paycheck, not a statement from their broker.  While the economy’s growth last year was the same as it had averaged over the prior three years, the share that goes to wages continues to be very weak.

And for those people – a Teamster in Toledo, a waitress in Waverly, and a machinist in Mansfield – building a secure, middle-class life is as tough as ever.

The policies of this Administration, and this Congress, are only making these problems worse. 

The tax bill raises healthcare premiums, gives a huge boost to the richest people in the country, and could encourage more outsourcing. It keeps in place a tax deduction corporations get for shutting down an American factory, and they’ll be enticed to do it even more, because companies could owe absolutely nothing to the IRS on overseas manufacturing operations.

Meanwhile, our kids will be left with the tab, picking up $1 trillion in new deficits. 

I will be the first to acknowledge when a company does the right thing and boosts wages. I was asking bank CEOs to increase pay for their tellers, custodians, and contract workers long before the labor market was tight. I thanked them when they did. And I offered an amendment to the tax bill to reward companies that did right by their workers.

So I am happy that a combination of factors has caused some employers to pay their workers more. But let’s keep it in perspective.

Take Wells Fargo – after the tax bill, the bank put out a press release to brag about raising pay to $15 an hour.  But last week, the bank announced it was buying back $22.5 billion of its own stock this year, dwarfing what it passed on to workers. That’s 288 times more spent to juice their stock than the cost of raising worker pay.

And Bank of America announced a $17 billion stock buyback, while saying it was phasing out free checking for certain customers, now charging them $12 a month.

The middle-class isn’t just getting the short end of the tax bill.  We also know they will pay the price if we roll back the rules for the financial industry.  But this comes as no surprise, since this Administration looks like a retreat for Wall Street executives.

The Treasury has issued a steady drumbeat of reports suggesting hundreds of changes to our consumer protection and financial stability rules that will make the risk and severity of the next crisis much greater.

The FSOC’s tools are only as powerful as its members’ willingness to use them. While past members of the FSOC were eager to do the hard work of keeping Wall Street honest, this new team would rather join them for schnapps at a Swiss ski resort.

Instead of fulfilling Wall Street’s wish list, we should be finding a long-term solution for our budget, investing in our nation’s crumbling roads and bridges, and ensuring that workers can keep the pensions they’ve earned.  I agree with the FSOC’s warning that many multi-employer plans are in tough shape, and if the Congress and the Administration don’t act soon, we threaten the promises made to millions of retirees. 

I look forward to today’s hearing and thank the Chairman and the Secretary.