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, “The Semiannual Monetary Report to Congress.”
Brown’s remarks, as prepared for delivery, follow.
Senator Sherrod Brown
“The Semiannual Monetary Report to Congress”
July 13, 2017
Senator Crapo, thank you for holding this hearing. Chair Yellen, welcome back to the Committee.
Chair Yellen, since your last appearance before the Committee, the Fed has increased the federal funds rate twice, employers continue to create jobs – although at a slightly slower pace than last year – and wages have increased modestly.
The Fed continues to lay out its plans to sell off the securities that it purchased during the financial crisis. And the biggest banks are making record profits and just passed the Fed’s 2017 stress tests.
At the same time, too many Americans are struggling to make ends meet. They worry their children will not have the economic security they do. Life expectancy in many parts of the country is falling, which tells us something about our economy.
So I am very troubled by what I am hearing from this Administration, some Republicans, and parts of the banking industry.
Even though a fifth of homeowners with a mortgage are still seriously under water in cities across Ohio, and even though the wealth gap between white and black families has widened, the Administration seems to want to let Wall Street gamble with the financial futures of working families once again.
Gutting protections for working Americans is back in style in parts of Washington – from the Treasury Department’s report, to the Financial CHOICE Act, to the House’s financial appropriations bill. We face a slate of nominees for watchdog positions who are of Wall Street, by Wall Street, and for Wall Street.
Ten years ago, Chairman Bernanke sat where you do.
After describing the economic conditions in the housing and business sectors, including concerns about subprime mortgages, global economic trends, and consumption and labor data, he concluded, “Overall, the U.S. economy appears likely to expand at a moderate pace over the second half of 2007, with growth then strengthening a bit in 2008…”
We must not forget what actually happened next: a devastating financial crisis. Working families in Ohio and across the country cannot forget – they’re still digging out.
I mention this not as a criticism of Chairman Bernanke. He had plenty of company in missing the signs of an impending collapse.
But when it happened, he took aggressive action to confront that crisis. And he learned the lessons that came at such a high cost.
After the crisis, we put rules in place that have strengthened the capital positions of banks, provided more stable liquidity, and improved protections for consumers and taxpayers.
Lobbyists are using the success of these reforms as proof that they should be gutted. They’re arguing that the results of the Fed’s stress tests prove that we can relax the rules. Having passed the test once, they want to make the test easier.
I’m sure every college student you taught who struggled in class would have wanted the same thing. But they, unlike the banks, would have been embarrassed to ask.
The financial crisis was caused in part by watchdogs who were busy focusing on bank profits instead of ensuring that banks were treating their consumers fairly and had enough capital to weather a downturn.
Everyone on this dais can agree that there are parts of Wall Street Reform that could be improved.
But our focus should be on growing a stronger economy for everyone, in every corner of the country – and particularly in communities too often forgotten in this town.
That means protecting consumers, improving the economic security of communities of color, and strengthening the working and middle class families who felt the devastation of the 2008 financial crisis the most.
That means lowering the cost of health care, investing in infrastructure, and expanding education opportunities and job training. That’s how we spur long-term economic growth that lifts up all Americans.
Weakening safeguards to boost bank profits and crossing our fingers that Wall Street will invest some of those profits in the real economy, instead of just passing it along to their shareholders, will not prevent another crisis—it will only hasten the next one.
Chair Yellen, I look forward to hearing your thoughts on these matters.
Thank you, Mr. Chairman.