Brown Opening Statement at Committee Hearing on Economic Growth
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 entitled, “Fostering Economic Growth: The Role of Financial Institutions in Local Communities.”
Brown’s remarks, as prepared for delivery, follow.
Senator Sherrod Brown - Opening Statement
Hearing: “Fostering Economic Growth: The Role of Financial Institutions in Local Communities”
Chairman Crapo, thank you for holding this hearing. And I want to echo the Chairman, thanking all the groups and individuals who submitted economic growth proposals to the Committee.
With the loss of good manufacturing jobs throughout the industrial heartland prior to and during the 2008 financial crisis, it is no wonder that the economic recovery has been uneven.
The crisis was devastating to millions of Americans, and for those who want full-time work, the jobs just aren’t there.
Foreclosures and job losses hit African American and Latino communities particularly hard during the crisis. One study found that the average wealth of white families has grown three times as fast as the rate for African-American families and 1.2 times the growth rate for Latino families. At these rates, it will take hundreds of years for these families to match what white families have today.
Across Ohio I have seen the impact of the uneven economic recovery—in both urban and rural areas. Specifically, the lack of opportunities in communities has contributed to an increase in prescription opioid overdose, abuse and dependence. Between now and lunchtime, odds are someone in my state will die of an overdose.
One of my staff members was meeting with the Chairman of a small bank in Gallipolis, Ohio – a town in Southeast Ohio.
He thought the banker would want to talk about Dodd-Frank, but what he really wanted to talk about was opioid addiction – it was ravaging his community.
By one estimate, this crisis has cost our economy $78.5 billion, to say nothing of the physical, social, and emotional costs to individuals and families who are coping with addiction.
We can’t ignore issues like this, and pretend they don’t affect the economy.
We also know the opioid epidemic in not unique to Ohio. I am curious to hear how it is impacting our witnesses’ communities and the institutions they represent.
Yet President Trump’s proposed budget would make the situation worse. He wants to slash or eliminate entirely programs that support economic development in both urban and rural communities, including job creation and transportation. It cuts important programs that provide access to affordable housing, and it would take away healthcare from millions of Americans, including as many as one million Ohioans, 200,000 of whom are getting help to control their substance abuse problems.
And while I keep hearing promises of an infrastructure package to make up for housing and transportation cuts, you can’t build a bridge with bullet points.
So as we discuss the role of financial institutions in local communities, I look forward to hearing new ideas to promote economic growth. I’m less interested in hearing old complaints about issues that have little or nothing to do with solving the economic issues plaguing our communities.
The evidence from the financial crisis shows that deregulation does not lead to sustainable economic growth, but a breakdown in consumer protections that can lead to a financial crisis.
Community banks and credit unions play a vital role in urban and rural communities. I’m glad their loan volume has grown and they are on a solid financial footing.
I’m pleased we have a representative from the Community Development Financial Institutions community at this hearing. Every $1 of public investment in CDFIs, generates $12 of private capital. They are working in low-income communities and finding alternatives to payday loans. And institutions like John Bissell’s are finding solutions in communities where manufacturers left, giving small business loans to former employees of GE, and working to solve housing and transportation needs.
They also aren’t afraid to do work in communities that other financial institutions have left. There are 242 CDFIs in 35 states headquartered in counties hard hit by the opioid epidemic, and CDFI Program awardees have made nearly 115,000 loans in these communities across 43 states, totaling $6.5 billion, helping to create or retain 65,000 jobs.
Yet, the Trump budget has proposed to eliminate the CDFI Fund. This is yet another example of the President’s agenda that I believe will do more harm than good to our struggling communities.
I’m open to considering proposals for small institutions that lower costs or cut red tape so they can better serve their customers. There is no point in paying for red tape we don’t need. And Congress has passed bills to do that, and the regulators have made changes.
But I will be interested in hearing the amount of economic growth that such changes would produce, too.
For real economic growth, financial institutions need to be partners with struggling communities--finding solutions to create jobs, make housing more affordable, and access transportation.
I look forward to hearing from today’s witnesses about their work to help struggling communities, and ideas that will generate economic growth.
Thank you, Mr. Chairman.
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