Brown Opening Statement at Banking Committee Hearing on the Comptroller of the Currency

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 titled ‘Update from the Comptroller of the Currency’.

 

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

Thank you, Mr. Chairman, and thank you Comptroller Otting for appearing before the Committee today.

In the more than seven years since we passed Wall Street Reform, our financial system is much stronger than it was at the outset of the Great Recession.

But much of that hard-earned progress has been threatened in the seven months since Comptroller Otting took over at the OCC – an agency that is supposed to be a watchdog for our nation’s biggest banks.

Comptroller Otting has said that the banks are his agency’s “customers”[1] and “partners.”[2]  That is the exact mindset that contributed to the crash.  We thought we got rid of the Office of Thrift Supervision for being an industry lapdog, but maybe it has been reincarnated.

The real customers of the OCC are the Ohio families, and people across the country, who suffer when the people they pay to ensure the stability of our financial system don’t do their jobs. 

In one of his first acts as Comptroller, Mr. Otting reversed course on changes meant to prevent OCC from becoming too close to the banks it oversees.  Comptroller Otting decided that examiners should continue to work out of the bank headquarters instead of the OCC to save money. Penny wise, pound foolish – but befitting a partnership.

And, it is not as if the banks have been suffering lately.

The FDIC released data last month showing that the industry increased its profits by 13 percent last year. When you take the tax bill into account, it’s 28 percent.

Rather than invest in their workers and communities, big banks are plowing profits into pushing up their stock price. The top ten largest U.S banks bought back $67 billion dollars in stock in 2017, an increase of nearly 70 percent over 2016.[3]

The CEOs of the six largest banks – who already make tens of millions of dollars a year – got an average 22 percent raise last year. For the CEO of Well Fargo, it was 36 percent.

Meanwhile, the average bank teller earns about $26,000 dollars a year.

When times are good, as they are in the ninth year of a recovery, banks should prepare for the tough times ahead.

Instead, our watchdogs are loosening the rules that should be guarding us against the next crash.

Right now, the OCC and Fed are considering a proposal to weaken protections and give a $121 billion dollar boost to the eight largest U.S. banks.

Comptroller Otting announced that he wants banks to get back into the business of payday loans, something that had been prohibited since 2002. He has also pulled back on guidance meant to protect the banking system from reckless corporate lending.

And he has other plans – plans that deeply concern members of this Committee and the civil rights community – to gut the Community Reinvestment Act, a 40-year-old law that pushes banks to serve their communities. The CRA emerged out of the civil rights movement to address generations of exclusion and discrimination in bank lending. That long legacy is a part of why we still have a racial wealth gap today.

It is clear that Comptroller Otting hasn’t learned the hard lessons of the recent past, including the OCC’s history of working to stop state and local protections on subprime mortgages, ATM fees, and credit card rate hikes.[4]  He is suffering from the same collective amnesia of too many in Washington, D.C.

Right now, families in Ohio and around the country—especially people of color— can’t afford to return to the risky practices Comptroller Otting is considering.  

I look forward to hearing the Comptroller’s testimony and answers to the Committee’s questions. 

Thank you Mr. Chairman. 

 

 

 

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[3] Cheung, Brian and Venkatesh Iyer. “Big Four U.S. Banks Driving Lion’s Share of Industry Buybacks.” S&P Global Market Intelligence, April 23, 2018. Available at: https://platform.mi.spglobal.com/web/client?auth=inherit#news/article?id=44153230&cdid=A-44153230-13365