Brown Opening Statement at Executive Session on Nominations to The Federal Reserve

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 executive session to vote on nominations to the Federal Reserve.

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

Three years ago, the Export-Import Bank’s charter expired. Three weeks after the charter expired the bank’s board lost its quorum, and the Bank lost its ability to approve deals above $10 million dollars. 

While the charter was renewed, this Committee refused to hold hearings and confirm President Obama’s nominees.  The bank hasn’t been fully operational for three long years – that’s three years of lost contracts for American manufacturers and lost jobs.

This past December, our Committee reported four nominees to the ExIm Board —Spencer Bachus, Claudia Slacik, Judith Pryor, and Kimberly Reed—but they have been blocked on the floor.

While the ExIm nominations have been pending before the Senate, three nominees for other positions who the committee acted on after the ExIm nominees– Jelena McWilliams, Thomas Workman, and Jay Powell – have been confirmed.

When the Republican leader keeps the Senate in session in August because of alleged obstruction of nominees, let’s be very clear that Republicans did and continue to block nominees, both President Obama’s and President Trump’s, for all kinds of reasons. This Republican obstructionism has real consequences for our economy, our manufacturers, and American jobs.

Now that we have extra time to address nominees, I hope Mr. Bachus, Ms. Slacik, Ms. Pryor, and Ms. Reed will soon be considered by the Senate.

Today, we consider two nominees to the Federal Reserve Board of Governors—Richard Clarida and Michelle Bowman. The Federal Reserve hasn’t had a full board since August 2013.  Neither Allan Landon nor Kathryn Dominquez received even a hearing last Congress in the committee.

Because of this, President Trump will have the ability to nominate at least six of the seven Fed governors to fourteen year terms. 

In addition to the vital work on monetary policy, these board members will be asked to vote on rules for the nation’s largest banks—the banks that caused the financial crisis and cost us millions of jobs and cost so many families their homes. 

They will vote on the Fed’s new proposal to roll back capital and leverage requirements that protect taxpayers from big bank bailouts, as well as the forthcoming rules required by S. 2155 that weaken standards for foreign banks, custody banks, and banks with assets over $50 billion. 

They will also have a say on diluting stress tests – the tool meant to ensure that banks can withstand economic shocks.

This Administration is undermining the framework put in place after the 2008 financial crisis.  That makes nominees to the boards of these agencies more important than ever.

After the nomination hearing for Dr. Clarida and Ms. Bowman, I did not have a clear picture from either nominee on how they would approach the many issues coming before the Fed.   

And that’s why questions for the record are important. It is an opportunity for members of this committee to follow-up if they are unclear on how the nominees view certain issues—like leverage, the Community Reinvestment Act, taxpayer protections for the biggest banks, diversity, and so many others that impact the people we serve. 

I was disappointed by the responses I received from Dr. Clarida and Commissioner Bowman. In fact, several of their responses were identical or nearly identical—these are in the committee’s record. 

Nominees need to take questions for the record seriously, both as part of the nomination process and once in office. The committee still has not received responses from Secretary Carson from the March oversight hearing on HUD, for example.

In this case, I’m not interested in the views of the Fed staff, as talented as they may be. The Ohioans I represent need to know how the people nominated to serve them think about these important issues.

I asked each of the nominees their views on the causes of the financial crisis – a pretty fundamental question.

Ms. Bowman responded by saying, “A build-up of leverage and maturity transformation in the years leading up to the crisis left the U.S. and global economy vulnerable to shocks.”

Dr. Clarida responded to the same question, “A build-up of leverage and maturity transformation in the years leading up to the crisis left the U.S. and global economy vulnerable to negative surprises.”

This is just one example. Many of my questions were answered like this, as were other members’ questions.

I will vote no on both nominees today. We need strong financial watchdogs who have their own ideas on the causes and impacts of the financial crisis, and who take their role to protect the taxpayer and homeowners from Wall Street abuse seriously.  I’m not confident that is the case with these nominees. I hope I’m wrong. Thank you, Mr. Chairman.

 

###