Sherrod Brown Leads Senate Banking Committee's Consideration Of Key Nominees
The Senate Banking Committee held a hearing to consider pending nominations.
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NewsTranscript
00:00:00Good morning, everyone.
00:00:01The Senate Committee on Banking, Housing and Urban Affairs
00:00:04will come to order.
00:00:06The committee meets today to consider four nominees,
00:00:10all long-time public servants,
00:00:12all overwhelmingly supported by both parties in this body.
00:00:17The Honorable Christy Goldsmith-Romero
00:00:19to be member and chairperson
00:00:20of the Federal Deposit Insurance Corporation, welcome.
00:00:24The Honorable Carolyn Crenshaw,
00:00:26nominated to be a member
00:00:27of the Securities and Exchange Commission, welcome.
00:00:30The Honorable Kristen Johnson
00:00:31to be assistant secretary of financial institutions
00:00:33at the Department of Treasury, welcome.
00:00:35And Mr. Gordon Ito to be a member
00:00:37of the Financial Stability Oversight Council
00:00:39to serve as the independent member
00:00:41with insurance expertise on FSOC, Mr. Ito, welcome.
00:00:45We thank the nominees for appearing today.
00:00:47I will make brief statements about each.
00:00:50I will swear each of you in,
00:00:52and I believe that Senator Warner has a statement,
00:00:55a brief statement.
00:00:57He wants to make about one of the nominees.
00:00:59Three nominees have already been confirmed unanimously.
00:01:03Ms. Goldsmith-Romero, Ms. Crenshaw, Ms. Johnson,
00:01:07all have been confirmed unanimously by the Senate.
00:01:10I'm hopeful we get the same kind of bipartisan cooperation
00:01:13that we see in this committee oftentimes again.
00:01:17Ms. Goldsmith-Romero has been confirmed
00:01:19by every member of the Senate multiple times.
00:01:22In a Washington far too divided, far too often,
00:01:25Republicans and Democrats on this committee
00:01:27and the Senate, and I appreciate Ranking Member Scott's
00:01:30bipartisanship on these kinds of matters,
00:01:33have agreed that these nominees possess the experience
00:01:35and the character to serve the public.
00:01:37The nominees have received strong statements today
00:01:41of support and support letters from a broad swath
00:01:44of the financial sector, services sector,
00:01:47including consumer groups, former regulators,
00:01:49state insurance commissioners, on and on and on and on.
00:01:52These nominees bring with them years of experience
00:01:55and a strong dedication to public service.
00:01:57If confirmed, each will play an important role
00:02:00in the success and stability of our financial system.
00:02:04The president nominated Christine Goldsmith-Romero
00:02:07to be a member and chairperson of the FDIC.
00:02:09As chair, she'll lead an agency responsible
00:02:11for protecting the bank accounts of millions of Americans
00:02:14across the country.
00:02:15Ms. Goldsmith-Romero is a highly qualified nominee,
00:02:19more than two decades of financial services experience.
00:02:23She served as a commissioner
00:02:24in the Commodities Future Trading Commission since 2022,
00:02:28after she was, again, underscore,
00:02:30unanimously confirmed by the Senate.
00:02:33At the CFTC, she's worked to ensure market integrity
00:02:36and protect commodity end users and consumers.
00:02:39Prior to joining CFTC, spent six years at the SEC,
00:02:43where she served as consul to SEC Chairs Shapiro,
00:02:47a Democrat, and Cox, a Republican,
00:02:50during administrations of both parties.
00:02:53She served as Special Inspector General for TARP,
00:02:57the Trouble Asset Relief Program.
00:02:58She took on that post in 2009,
00:03:02amid the worst financial crisis since the Depression,
00:03:05where she did vital work protecting taxpayers.
00:03:08She served in several roles
00:03:09in the Inspector General's Office at TARP,
00:03:12before being unanimously confirmed by the Senate
00:03:14to serve as the Special Inspector General.
00:03:17She managed a large staff of examiners and accountants
00:03:20and other investigative professionals.
00:03:22As the Inspector General,
00:03:23she followed the facts where they led.
00:03:25She wore her independence proudly.
00:03:28She helped the office meet its mission,
00:03:29in the process, recover literally billions of dollars
00:03:32for American taxpayers.
00:03:34During her decade as IG, she looked under the hood
00:03:37of many financially distressed banks and institutions.
00:03:40She knows how to spot signs of trouble.
00:03:42She knows what to look for
00:03:44when it comes to financial stability or instability
00:03:48or potential contagion.
00:03:50She understands regulation,
00:03:51the important role regulators play in ensuring the safety
00:03:55and soundness of financial institutions.
00:03:56She's proved that she will hold accountable
00:03:59those who engage in fraud and misconduct.
00:04:03Ms. Goldsmith-Romero's nomination comes at a pivotal time.
00:04:07Everyone here today agrees the FDIC
00:04:10needs drastic cultural change.
00:04:13Longstanding issues of harassment and misconduct
00:04:16have plagued the agency for over a decade
00:04:18under multiple chairs, chairs of both parties.
00:04:23The women and men of the FDIC deserve a workplace
00:04:25free of harassment and misconduct.
00:04:27That's why I called weeks ago on the president
00:04:29to nominate a new, highly qualified chair.
00:04:32And Ms. Goldsmith-Romero is that.
00:04:34Tough, fair, accomplished regulator, manager,
00:04:37track record in making sure bad behavior doesn't go unchecked.
00:04:41Listen to people who've worked with her,
00:04:42the people have seen her character up close.
00:04:44Christopher Cox, former Republican SEC chair,
00:04:48wrote the committee and said this.
00:04:50She is a consummate professional.
00:04:52Her skill and objectivity are the reason
00:04:54she's worked successfully across multiple administrations
00:04:57of different parties.
00:04:58That high level of professionalism is reflected
00:05:02in the fact that she has twice been unanimously confirmed
00:05:05to her important financial regulatory positions.
00:05:07I believe that Senator Scott,
00:05:11and I believe as a house member,
00:05:12served with Congressman Cox as I did, perhaps not,
00:05:15but I know they have been acquaintances
00:05:18and friends over the years.
00:05:19Not to speak for the ranking member, of course.
00:05:23Committee also received a letter of support
00:05:24from a group of bipartisan women
00:05:26who have spent decades working in financial services
00:05:29as congressional staff, federal agency staff,
00:05:31and industry representatives.
00:05:33Leadership starts at the top.
00:05:34She's the right choice to lead the agency
00:05:36as it charts a much needed transformation of its culture.
00:05:41Congratulations on your nomination.
00:05:42President's re-nominated Caroline Crenshaw
00:05:45to be to a full term
00:05:46on the Securities and Exchange Commission.
00:05:48She has joined the SEC board in 2020
00:05:51after being nominated by President Trump,
00:05:54and who was a Republican,
00:05:56and unanimously confirmed by the Senate.
00:05:58In her four years as a commissioner,
00:06:00or he is the Republican, I'm sorry.
00:06:02He's still Republican.
00:06:03Okay, he's, okay.
00:06:07As we all follow.
00:06:09In her four years as commissioner,
00:06:10Ms. Crenshaw has been a fierce advocate
00:06:12for protecting Americans' money,
00:06:14has routinely fought to make our markets
00:06:16more fair and more transparent.
00:06:17Prior to her confirmation at the SEC,
00:06:20she served as a career staff attorney at SEC,
00:06:23as well as counsel to two commissioners.
00:06:25Prior to joining, Ms. Crenshaw worked
00:06:27in private law practice in Washington.
00:06:29In addition to her exemplary service to our country,
00:06:32Ms. Crenshaw is also an army reserve captain
00:06:34and the judge advocate, generals core.
00:06:37Welcome back, Ms. Crenshaw.
00:06:39Thank you for your service.
00:06:40Nice to see you.
00:06:41President's nominated Kristen Johnson
00:06:42to serve as assistant secretary for financial institutions
00:06:45at the Department of the Treasury.
00:06:46The office Ms. Johnson would lead
00:06:48of confirmed handles abroad portfolio,
00:06:50including financial institution policy,
00:06:53insurance, cybersecurity, community economic development.
00:06:56She brings with her a wealth of experience
00:06:58in the public and private sectors,
00:07:00as well as experience of academia,
00:07:03giving her a well-rounded understanding
00:07:04of financial institutions policy and regulation.
00:07:09She's currently served as a commissioner in the SCFTC
00:07:12after being unanimously confirmed by the Senate in 2022.
00:07:17CFTC, she serves a reliable voice for market participants
00:07:22and has fought for sound
00:07:23and competitive and efficient markets.
00:07:26Prior to joining CFTC, Ms. Johnson served as a professor
00:07:29of law for more than a decade,
00:07:31teaching at Emory and Tulane and Seton Hall University.
00:07:35She taught courses in banking law,
00:07:36financial institutions, securities, derivatives markets,
00:07:38financial institutions, and systemic risk law and policy.
00:07:42Earlier in her career,
00:07:43she worked for large financial institutions
00:07:44and in private law practice in New York City.
00:07:48Good to see you, Ms. Johnson.
00:07:49Thank you.
00:07:50Final nominee in today's panel
00:07:53is the only one that's not a woman.
00:07:55The president's nominated Mr. Ito
00:07:57to serve as the independent insurance expert on FSOC.
00:08:01If confirmed, he'd be one of 10 voting members in FSOC.
00:08:05Responsibility for monitoring
00:08:07and identifying financial instability risks,
00:08:10Mr. Ito's decades of insurance experience
00:08:13have prepared him to serve as a member of FSOC.
00:08:16Like the other nominees today, Mr. Ito is well-qualified.
00:08:20He currently serves as the insurance commissioner
00:08:22for the state of Hawaii.
00:08:24He first joined the Hawaii Division of Insurance
00:08:26some 30 years ago
00:08:28and has served in multiple roles within the office.
00:08:31As the insurance commissioner in the state,
00:08:34he's been a strong proponent
00:08:35for a fair and competitive insurance marketplace
00:08:38and for consumer protection.
00:08:39He's played an important role
00:08:41in helping Hawaii recover from the devastating wildfires,
00:08:45which result in the deaths of more than 100 residents
00:08:47and billions of dollars in damages.
00:08:49In addition to serving in Hawaii's insurance division,
00:08:53Mr. Ito's held several leadership roles
00:08:55with the National Association of Insurance Commissioners,
00:08:57including secretary treasurer.
00:08:59Early in his career,
00:09:00he worked in private law practice in Hawaii.
00:09:02You're welcome, Mr. Ito.
00:09:04Thanks again to the nominees.
00:09:06Ranking member, Scott.
00:09:09Thank you, Mr. Chairman.
00:09:10Thank you to the noms for being here with us this morning.
00:09:14While I appreciate the Senate's important role
00:09:15in the nomination process,
00:09:17unfortunately, what brings us here today
00:09:19is a classic case of stubbornness.
00:09:22This administration wants to safeguard
00:09:24its progressive agenda, no matter the cost.
00:09:27Not the employees of the FDIC
00:09:29and not the people they are supposed to serve.
00:09:31Chairman Bloomberg has been at the helm
00:09:34of the FDIC for nearly two decades.
00:09:36And under his leadership tenure,
00:09:38he's allowed rampant harassment, discrimination,
00:09:42vile behavior to continue to flourish.
00:09:46That's why I've said it several times before this committee,
00:09:50Mr. Grunberg should resign immediately,
00:09:53not wait for someone to replace him,
00:09:56but start the culture of healing at the FDIC.
00:10:01Without that action, it is frustrating
00:10:05to the American people,
00:10:06frustrating to the employees at the FDIC
00:10:09that Mr. Grunberg refuses to do the right thing
00:10:12in spite a bipartisan coalition asking him to do so.
00:10:18Mr. Grunberg and his allies in the White House
00:10:20have decided to play politics instead.
00:10:23Chair Grunberg is refusing to step down
00:10:25until a Biden nominee is confirmed, no matter the timeline.
00:10:29That's like having a leak in your roof.
00:10:31Instead of fixing it, you just put a bucket underneath
00:10:34and wait and wait and wait.
00:10:38Common sense reminds me,
00:10:40the first step for restoration is stopping the leak
00:10:43and cutting out the damage so that repairs can begin.
00:10:49And it's clear, President Biden is not interested
00:10:51in cutting out the damage
00:10:53and not interested in accountability.
00:10:56Instead, the White House has taken this opportunity
00:10:59to try and make lemonade out of lemons
00:11:01by putting forward three additional nominees
00:11:03selected for the purpose
00:11:05of advancing his progressive regulatory agenda.
00:11:09And while I firmly believe
00:11:11we are here under false sense of urgency,
00:11:14we will do our very best to evaluate the nominees
00:11:16before us today on their merit
00:11:19and fulfill our constitutional responsibility.
00:11:23So let's start with Commissioner Bill Smith-Romero.
00:11:26Commissioner, I enjoyed you taking the time
00:11:29to be here and meeting with me a few days ago
00:11:30and having a serious conversation
00:11:32about what it takes to change the culture of the FDIC
00:11:37and deal with some of the really important challenges
00:11:40coming our way.
00:11:42While you've had a long career in public service,
00:11:45your background lacks the banking regulatory experience
00:11:48necessary to carry out the critical responsibilities
00:11:51of the FDIC and fulfill the requirements of the FDI Act.
00:11:55The foremost mission of the FDIC
00:11:57is to maintain stability and confidence
00:11:59in our financial stability in the system,
00:12:02an important task that was front and center
00:12:06just last year as we watched SVB fail.
00:12:09The FDIC must ensure deposits, examine,
00:12:12and supervise financial institutions
00:12:13for safety and soundness and consumer protections
00:12:16while standing ready to manage receivership
00:12:19of failed institutions.
00:12:20This is no small task.
00:12:23You have little experience with bank supervision
00:12:25or prudential law policymaking,
00:12:26let alone managing the world's largest deposit insurer.
00:12:30The next year needs to be prepared to lead
00:12:33because not only are we going to have to confront
00:12:36the magnitude of Bowser III endgame,
00:12:39but as I said a few times already,
00:12:41correcting the culture at the FDIC is so important
00:12:45and it makes it challenging to have on the job training
00:12:48from my perspective.
00:12:50Turning to the management challenges at the FDIC,
00:12:52as we've discussed,
00:12:53I'm concerned with your ability
00:12:55to lead in much needed cultural change.
00:12:58We talked in my office about the number of whistleblowers
00:13:01who've come forward and talked about
00:13:03your management approach as well.
00:13:05And I look forward to having an opportunity
00:13:08for you to share your responses
00:13:11during the question and answer part of this meeting today.
00:13:15Our next nominee, Ms. Carolyn Crenshaw,
00:13:18has been re-nominated for an additional five-year term
00:13:21ending in June of 2029 to serve as a member of the SEC.
00:13:25Commissioner Crenshaw, while I respect your deep knowledge
00:13:28of the capital markets, I have significant reservations
00:13:31over your nomination based on your views
00:13:33of what appears to be the limpless authority of the SEC.
00:13:36Take for example, the SEC's Climate Disclosure Rule,
00:13:40which the SEC has received nearly 24,000 letters
00:13:43on since its proposal.
00:13:45Despite widespread concern from the public,
00:13:47including from myself as well as both Democrats
00:13:49and Republicans on this committee,
00:13:51you expressed frustration that the SEC didn't go far enough
00:13:55in its final rule.
00:13:57Furthermore, you've urged the SEC to contort its authority
00:14:00over the private markets, praising the finalization
00:14:03of the Private Fund Advisory Rule as an important step
00:14:06in the name of investor protection, competition,
00:14:09and market integrity.
00:14:10We know that the Fifth Circuit disagrees,
00:14:13ruling that the SEC went beyond the powers granted to it
00:14:16by Congress and the Investment Advisor Act.
00:14:20Our capital markets should not be a testing ground
00:14:22for the expansion of the administrative state
00:14:24and your past actions give me serious pause
00:14:27for considering your nomination.
00:14:29I'll close with this.
00:14:31I find it incredibly frustrating
00:14:33that we find ourselves here today,
00:14:35as this is a prime example of the Biden administration's MO
00:14:39of politics over people.
00:14:41While I look forward to hearing from the nominees,
00:14:43I must reiterate that real meaningful change
00:14:46could be brought to the employees of the FDIC today
00:14:50if Marty Goodenberg would simply step down.
00:14:55Will the four nominees please rise?
00:14:59Raise your right hand.
00:15:02Do you swear or affirm that the testimony
00:15:04that you're about to give is the truth,
00:15:05all truth and nothing but the truth, so help you God?
00:15:09Do you agree to appear and testify
00:15:11before any duly constituted committee of the Senate?
00:15:15Please be seated.
00:15:16Senator Warner of Virginia would like
00:15:18to introduce Ms. Goldsmith-Romero.
00:15:20I would, Mr. Chairman.
00:15:21I thank you for that and I thank you for your comments
00:15:24about all the nominees.
00:15:26I think they are all uniquely qualified
00:15:30and hope we will follow the tradition of this committee
00:15:32and that we will weigh these individuals on their merits.
00:15:36But I'm particularly here to introduce
00:15:39Christy Goldsmith-Romero,
00:15:41who is nominated to be the next chair of the FDIC
00:15:43and currently serves as a commissioner
00:15:45on the Commodities Future Trading Commission.
00:15:48I'm proud to say that Christy
00:15:49is a Virginian through and through.
00:15:51She grew up in Virginia Beach,
00:15:53where her family continues to live
00:15:55and her sister runs a small business.
00:15:57She attended Virginia Beach schools,
00:15:59is a graduate of Old Dominion.
00:16:01She's lived in Arlington for more than 20 years
00:16:04with her wife, Adrienne, who I had a chance to meet,
00:16:06and their three daughters, Kelsey, Brooke, and Julia,
00:16:09all, again, who attended Arlington Public Schools.
00:16:12She's also a grandmother of two beautiful grandchildren
00:16:14who also live in Northern Virginia.
00:16:17Christy's father, Augusto Rami Romero,
00:16:19came to America from the Philippines as a young man.
00:16:22He became a US citizen, served in the US Navy for 20 years,
00:16:26and was stationed in Norfolk.
00:16:27Her brother, Scott, served in the military
00:16:30with deployments to Bosnia, Afghanistan, and Iraq,
00:16:32and her brother-in-law is currently a retired SEAL.
00:16:37Continuing her family's deep dedication
00:16:39to serving our nation for the last two decades,
00:16:41the commissioner has dedicated much of her career
00:16:44to protecting consumers and investors
00:16:47as a financial regulator with leadership roles at the SEC,
00:16:52the Treasury Department,
00:16:54and her current position as commissioner at the CFTC.
00:16:57In these positions, she has focused on results,
00:16:59reform, and accountability,
00:17:01all things that are gonna be needed at the FDIC,
00:17:04and I believe will bring a broad range
00:17:07of relevant experiences to this new role.
00:17:12For example, she served for more than a decade
00:17:14as a special inspector general
00:17:16for the Troubled Asset Relief Program, SIGTAR,
00:17:19and we all remember the challenges that were faced there.
00:17:23In this role, her office was charged
00:17:25with acting as a watchdog over federal resources
00:17:28that were authorized by Congress
00:17:29to stabilize our financial system and support homeovers
00:17:33during that challenging, challenging time.
00:17:35During her tenure as special inspector general,
00:17:38her office recovered $11 billion for taxpayers
00:17:43and was responsible for convictions
00:17:45for more than 400 individuals who committed fraud,
00:17:48money laundering, and other crimes.
00:17:51That sounds like the kind of experience we need at the FDIC.
00:17:57In addition to her history of results there at SIGTAR,
00:18:01she has worked and spent her career working again,
00:18:03as the chairman said, on a bipartisan basis,
00:18:06serving as counsel for two SEC chairs
00:18:09during the financial crisis,
00:18:11including, as the chairman pointed out,
00:18:12President Bush's SEC chair, Chris Cox,
00:18:15who was very, very active during that time.
00:18:18And again, to remind folks,
00:18:21she has been unanimously, unanimously,
00:18:23that means all 100 of us,
00:18:26confirmed by the Senate twice.
00:18:28Now, there are a number of letters and recommendations
00:18:31that Christy has received.
00:18:31I would point out one from Shira Bear,
00:18:34who many of us, again, on this committee,
00:18:36in a bipartisan way have worked with over the years
00:18:39from the crisis and afterwards,
00:18:40who again, if anyone would know
00:18:44what were the needed skills to be chair of the FDIC,
00:18:47I'd count Shira Bear pretty high in that list
00:18:50since she served as President Bush's head of the FDIC
00:18:55from 2006 to 2011.
00:18:58In her current role at the CFTC,
00:18:59she sponsors the Commission's Technology Advisory Committee,
00:19:03where she is engaged with industry and other stakeholders
00:19:05on challenges and risk and AI, blockchain,
00:19:09and digital assets.
00:19:10And again, in our conversations,
00:19:12I think going at the FDIC from that regulatory position,
00:19:15having a knowledge, a technology-based knowledge
00:19:18about how AI is gonna change our systems
00:19:20and our banking regulations, blockchain,
00:19:23and the whole realm of digital assets,
00:19:25this is exactly the kind of experience we need
00:19:29at this troubled agency at this point.
00:19:31Christy's dedication to public service,
00:19:33the breadth of her bipartisan work experience,
00:19:35and her many accolades
00:19:36for improving financial accountability in the sector
00:19:40make her well-qualified to take the lead at the FDIC
00:19:45at the crucial time in its history.
00:19:46And I have complete doubt
00:19:47that she can make the kind of cultural change,
00:19:50and we spend a lot of time talking about this,
00:19:52in this role, I hope, when she's confirmed.
00:19:55So I look forward to her testimony.
00:19:57Mr. Chairman, I've got to step out for a minute,
00:19:58but I'll be back in time for my question.
00:20:00Thank you so much.
00:20:01Thank you, Mark.
00:20:03Thank you to all four of you.
00:20:04Please proceed, beginning with Ms. Goldsmith-Romero.
00:20:08Welcome.
00:20:10And feel free, all of you, to introduce family members
00:20:12at the beginning of your testimony.
00:20:14Certainly, I know people like to do that for good reason.
00:20:16Thank you.
00:20:18Chairman Brown, Ranking Member Scott,
00:20:19and members of the committee,
00:20:20thank you for this opportunity and for your consideration.
00:20:24I'm honored to be nominated by President Biden
00:20:26to serve as the chair of the FDIC.
00:20:28Thank you, Senator Warner,
00:20:30for your gracious words and support.
00:20:32I do want to introduce my wife, Adrienne,
00:20:34and my daughters, Kelsey, Brooke, and Julia.
00:20:36I'm incredibly grateful for their love and support.
00:20:39I also want to thank my parents and my in-laws,
00:20:42my son-in-law, my grandsons and siblings,
00:20:44for their love and support.
00:20:45Yes, I said grandsons.
00:20:47I am a very happy grandmother.
00:20:51I grew up in a military family
00:20:52where my parents raised me to be respectful and kind.
00:20:55My mom was a homemaker and later a school teacher,
00:20:58and my dad came from the Philippines
00:20:59and became a U.S. citizen after joining the U.S. Navy,
00:21:03where he served for 20 years.
00:21:05So he inspired my own service 22 years
00:21:08under four presidents at the SEC, Treasury, and the CFTC.
00:21:13This nomination and your consideration
00:21:15are a testament to the American dream
00:21:17that my parents worked to achieve.
00:21:20I have dedicated my career
00:21:21to the stability of our nation's financial system
00:21:24so that it can serve families and businesses
00:21:26in search of their American dream.
00:21:28At the SEC, I protected investors and markets,
00:21:31and I was counsel to SEC Chairs Chris Cox and Mary Shapiro
00:21:35during the financial crisis.
00:21:36After witnessing how a crisis on Wall Street
00:21:39can take a toll on Main Street,
00:21:40I wanted to be part of the solution.
00:21:42So I helped build an independent office at Treasury
00:21:45called the Office of Special Inspector General
00:21:47for the Troubled Asset Relief Program, or SIGTARP.
00:21:50Congress created TARP to provide $442 billion
00:21:55for more than 700 banks, housing,
00:21:57autos, insurance, and derivatives.
00:22:00Secretary Paulson said TARP was necessary
00:22:02to restore confidence in the banking system,
00:22:04and that is how SIGTARP viewed our mission.
00:22:06I was privileged to lead SIGTARP for 11 years
00:22:09where everyone pulled together
00:22:10to accomplish this massive mission.
00:22:12And SIGTARP was successful.
00:22:14We brought transparency and oversight
00:22:16through reporting and recommendations.
00:22:18We protected TARP funds, recovering more than $11 billion,
00:22:21which was 27 times our cost.
00:22:24SIGTARP was known for its ability
00:22:25to uncover hidden fraud in banks.
00:22:27And I credit that to a proactive analytics-based system
00:22:30that we developed working
00:22:32within the bank supervisory privilege.
00:22:34We brought accountability through civil actions
00:22:36against large financial institutions
00:22:38and criminal convictions of more than 400 individuals,
00:22:41including 95 bankers and more than 90 bank borrowers,
00:22:45often related to failed banks.
00:22:47Court sentenced 75 bankers to prison.
00:22:50I also gained a great appreciation for community banks
00:22:53because 625 banks in TARP
00:22:55were less than $100 million in size.
00:22:58And as I told Congress in 2011,
00:23:00small and medium-sized banks play an important role
00:23:02in our nation's economy and are the lifeblood
00:23:04of many communities across the country.
00:23:06They provide credit to small businesses and farms
00:23:09and serve customers in rural areas
00:23:11and small metropolitan areas not served by big banks.
00:23:14So my experience at the SEC, SIGTARP,
00:23:16and at the CFTC regulating derivatives
00:23:19will be invaluable if confirmed.
00:23:21Derivatives are an important tool
00:23:22to manage risk, particularly for the agricultural sector.
00:23:25At the same time, derivatives substantially contributed
00:23:28to the 2008 crisis,
00:23:30and the FDIC recently found shortcomings
00:23:32in the living wills of four large banks
00:23:34related to derivatives.
00:23:36So there's more to do.
00:23:37If confirmed, I will keep top of mind
00:23:39the significance of leading an agency
00:23:41tied to the financial well-being of every American
00:23:44and would prioritize maintaining stability
00:23:46and confidence in the financial system.
00:23:48As employees need to be supported
00:23:50in the FDIC's critical mission,
00:23:51I would prioritize a complete overhaul
00:23:53of the FDIC's workplace culture.
00:23:55The reporting is deeply disturbing
00:23:57and describes deep-seated cultural issues
00:23:59that have caused pain for many employees.
00:24:01It must not continue, and I will bring accountability.
00:24:05I would also ensure that banks of all sizes
00:24:07can provide depository services and loans
00:24:10to businesses and households,
00:24:12which is necessary for the U.S. economy.
00:24:14I would ensure that banks
00:24:15appropriately manage emerging risk
00:24:17and that the government keeps pace
00:24:19as banking has modernized.
00:24:22If confirmed, I look forward
00:24:23to working with Congress on these issues.
00:24:26To be entrusted with leading the FDIC in this mission
00:24:29and at this moment would be a great honor.
00:24:32Thank you.
00:24:34Thank you, Ms. Goldsmith-Romer.
00:24:36Ms. Grenshaw, you're welcome to be here for five minutes.
00:24:40Thanks.
00:24:40Your statement.
00:24:43Chairman Brown, Ranking Member Scott
00:24:45and distinguished members of the committee,
00:24:47thank you for the opportunity to appear before you.
00:24:51I'm delighted to be considered for reappointment
00:24:53to the Securities and Exchange Commission.
00:24:56Last month, with the 90th anniversary
00:24:59of the passage of the Securities Exchange Act of 1934,
00:25:03which was established with the SEC
00:25:05during the Great Depression.
00:25:07Over the years, the SEC and its staff
00:25:09have worked on behalf of generations of Americans
00:25:13to help ensure that the securities markets
00:25:15are fundamentally fair and safe
00:25:18for the purpose of protecting our hard-earned dollars.
00:25:20This capital in turn has financed all manner of businesses
00:25:24and allowed our economy to thrive.
00:25:28I have had the privilege to contribute
00:25:30to the SEC's work for over a decade.
00:25:32I began my career at the SEC as a staff attorney
00:25:35in the Division of Exams,
00:25:37helping to oversee institutions
00:25:39that manage millions of American savings.
00:25:43I also served in the Division of Investment Management
00:25:45and as counsel to Commissioners Cara Stein
00:25:48and Robert Jackson,
00:25:50focusing on how to strengthen investor protections
00:25:53in our increasingly complex markets.
00:25:56Most recently, I have served as a member of the Commission.
00:25:59Using the expertise I developed as a member of the staff,
00:26:03of the securities laws, of the markets we regulate,
00:26:06and of the inner workings of the institution itself
00:26:09to bring independent thought and analysis
00:26:12to the service of our mission.
00:26:16In addition to my SEC work,
00:26:17I also serve in the United States Army Reserve
00:26:20Judge Advocate General's Corps.
00:26:22My SEC and Army lives sometimes intersect
00:26:26in good ways and in bad.
00:26:28I've been committed to bringing a message
00:26:30of financial readiness to American service members.
00:26:34Speaking with service members, cadets, midshipmen
00:26:38about the securities markets and financial literacy
00:26:41has been a highlight for me.
00:26:44Unfortunately, I'm also aware of the fraudsters
00:26:46who prey on everyday Americans,
00:26:49including service members and their families.
00:26:52In one particularly troubling SEC enforcement action,
00:26:55it's alleged that an Army financial counselor
00:26:57defrauded the families of fallen soldiers.
00:27:01If confirmed, I intend to continue to educate
00:27:04and advocate for strengthening protections
00:27:06for American service members.
00:27:09I would also work tirelessly
00:27:11in support of the SEC's mission,
00:27:13protecting investors, maintaining fair, orderly,
00:27:15and efficient markets, and facilitating capital formation.
00:27:19To me, this means promoting trust in the securities markets
00:27:23by reducing opportunities for bad actors
00:27:25to engage in fraud and manipulation.
00:27:28It means ensuring that investors have access
00:27:31to appropriate and truthful disclosures
00:27:33that help them make informed investment decisions.
00:27:37It means ensuring that the investment professionals
00:27:39fulfill their obligations to customers
00:27:42and elevate their interests above their own.
00:27:46And it means balancing the interests
00:27:47of those who participate in our markets
00:27:49to help ensure smaller players have the chance to compete.
00:27:54I believe that this framework benefits investors
00:27:56and those seeking to raise capital alike,
00:27:59and it's a pillar of our economy.
00:28:02Thank you to my husband, Alex Cole,
00:28:04who's here today, and my family.
00:28:06They are with me for their unwavering support.
00:28:09The littlest ones are at camp and at home.
00:28:12We figured we didn't want them disrupting
00:28:14the proceedings today.
00:28:16And thank you also to my fellow commissioners.
00:28:19Our discourse, although at times differing,
00:28:22leads to more thoughtful outcomes
00:28:24on behalf of the American public.
00:28:27And of course, thank you to the SEC staff.
00:28:30The talent, ingenuity, and commitment
00:28:32of the public service at the agency cannot be overstated.
00:28:36It's been a privilege and an honor to work alongside them
00:28:39in support of the SEC's mission.
00:28:42I feel truly honored to be here today.
00:28:44Thank you for your time and consideration,
00:28:46and I look forward to answering your questions.
00:28:48Thank you, Ms. Crenshaw.
00:28:49Ms. Johnson, you're recognized for five minutes.
00:28:51Thank you for joining us.
00:28:52Thank you.
00:28:54Good morning, Chairman Brown, Ranking Member Scott,
00:28:56and other distinguished members of the committee.
00:28:59It is a privilege to appear before you today.
00:29:03I'm joined by my parents and my son, Jackson,
00:29:06and good friends from law school and law teaching.
00:29:09I'm honored to have been nominated by President Biden
00:29:11to serve as Assistant Secretary for Financial Institutions
00:29:15at the Department of Treasury.
00:29:17If I'm confirmed, I hope to draw upon my experience gained
00:29:22as an academic, a lawyer, in-house counsel
00:29:25in one of the largest treasury services divisions
00:29:28at one of the largest financial institutions in the world
00:29:31to ensure the strength and stability of our economy
00:29:35and to ensure the integrity of financial markets.
00:29:39I'm also hopeful to work tirelessly to ensure access
00:29:43for American individuals and families
00:29:45to credit housing and financial services
00:29:49on fair and reasonable terms.
00:29:52As a commissioner at the CFTC,
00:29:54I've advocated for customer protection
00:29:56and encouraged the adoption of recovery
00:29:59and resilience reforms, cyber preparedness,
00:30:02risk governance, and the effective enforcement
00:30:06against both sophisticated and garden variety fraud.
00:30:10For nearly two decades, I've researched, published,
00:30:14and taught about financial market risk regulation
00:30:17and financial market risk and regulation.
00:30:20As an Associate Dean
00:30:21at Emory and Tulane University Law Schools,
00:30:24I've held endowed professorships,
00:30:26received research awards and fellowships,
00:30:28and had the great pleasure of teaching many students.
00:30:32My research aims to identify, assess, and address
00:30:37exogenous, endogenous, and emerging risks
00:30:41in financial markets.
00:30:43During the global financial crisis of 2007 to 2009
00:30:47and the ensuing Great Recession,
00:30:48a period characterized by falling GDP,
00:30:51double-digit unemployment,
00:30:53and dissipating retirement account and home values,
00:30:56I proposed reforms for the deeply interconnected,
00:30:59opaque, bespoke, bilateral credit derivatives markets.
00:31:03My recommended reforms aim to enhance transparency,
00:31:07reduce counterparty credit risk, as well as liquidity risk,
00:31:10and to facilitate price discovery,
00:31:13each important to the stability of the financial system
00:31:16and to end users, such as farmers, ranchers, and growers
00:31:20who rely on derivatives markets for price discovery.
00:31:23Today, transformational innovation
00:31:25with light-speed operational infrastructure
00:31:28promises to increase equity, access,
00:31:30transparency, and efficiency.
00:31:32In 2019 and again in 2021, I testified before Congress
00:31:36emphasizing the need for responsible innovation,
00:31:39the significance of financial technology firms,
00:31:43the rise of artificial intelligence,
00:31:45and the creation of blockchain technology.
00:31:47These innovations promise to address an issue
00:31:50at the heart of my work, financial inclusion.
00:31:54For far too many in our country,
00:31:56particularly families in fragile financial circumstances,
00:32:01it can be extraordinarily expensive to be poor.
00:32:05Throughout my career,
00:32:07I've emphasized financial inclusion, entrepreneurship,
00:32:10and access to credit for local businesses,
00:32:13values I learned growing up in the Midwest and South
00:32:16and as a student at Georgetown University
00:32:18and the University of Michigan Law School.
00:32:20My great-great-great-grandfather, Alexander Moss,
00:32:23was born in May of 1821.
00:32:25And as a young man, his parents relocated
00:32:27to a town on the Wabash River,
00:32:29about 80 miles north of Indianapolis.
00:32:31There, he founded a storefront business
00:32:34and became a celebrated businessman,
00:32:35offering loans to African-American families and businesses
00:32:38with limited access to traditional lines of credit.
00:32:41He campaigned for the building of a school and a church
00:32:44in the African-American community.
00:32:46My family has maintained a strong commitment
00:32:48to public service.
00:32:49Shortly after graduating high school,
00:32:51my uncle volunteered for active duty during the Vietnam War.
00:32:54Others have served as judges, legal aid lawyers,
00:32:57teachers, nurses, and healthcare professionals
00:33:00supporting indigent communities.
00:33:03I'm grateful to my parents who join me today.
00:33:09They reinforce these values
00:33:11and they've given me and my three sisters
00:33:13a sense of infinite possibility.
00:33:16I'm also joined by my son,
00:33:17a rising fifth grader at Georgetown Day School
00:33:20and an aspiring engineer
00:33:22or a professional soccer player, depending.
00:33:26Jackson, I'm grateful to you for your patience
00:33:29as I work to be in service of others
00:33:31and to teach you that we must measure our actions
00:33:35by what we do for those who are most in need.
00:33:37Thank you very much.
00:33:39I welcome your questions.
00:33:42Normally I don't interject like this,
00:33:44but I love the look on who I believe your mother's face
00:33:47as she looked at Jackson, your grandson,
00:33:49when you said that.
00:33:51Mr. Ito.
00:33:54Chairman Brown, Ranking Member Scott,
00:33:56and distinguished members of the committee,
00:33:58it is my honor and privilege
00:33:59to appear here before you today.
00:34:02I'm very honored and humbled
00:34:03to be President Biden's nominee for this position
00:34:06as the independent member with insurance expertise
00:34:09on the Financial Stability Oversight Council,
00:34:12also known as FSOC.
00:34:14I also want to thank you and your staff
00:34:16for the time you have spent with me during this process.
00:34:20First, I'd like to mention and thank my wife, Joy,
00:34:23who would have liked to be here with me today.
00:34:26Joy has always been very supportive
00:34:28and been a tremendous help through this entire process.
00:34:32However, due to a planned family vacation
00:34:35in which we committed to leave nine members,
00:34:38other members on, she was unable to attend today.
00:34:42Our family member departed on their flights yesterday
00:34:45and tomorrow will start on my journey
00:34:48to try to catch up with them.
00:34:51I was born and raised in the town of Hilo, Hawaii.
00:34:55The neighborhood I grew up was idyllic.
00:34:57We all knew our neighbors.
00:34:59More importantly,
00:35:00we all have one another neighbor, healthy neighbor.
00:35:04This upbringing instilled in me a value
00:35:07to try my best to contribute in whatever small way I can
00:35:11to help my community.
00:35:14After graduating with degrees in finance and law,
00:35:17I practiced law for nearly seven years.
00:35:20This then as life takes its unexpected twists and turns,
00:35:24hurricane Iniki struck and devastated the island of Kauai.
00:35:29This unfortunate set of circumstances led me
00:35:32to the Hawaii Insurance Division as a staff attorney.
00:35:37The value instilled in me to help others
00:35:39has kept me at the insurance division for over 30 years
00:35:43and then resulted in my interest in this position.
00:35:47Through my years at the insurance division,
00:35:50I have gained a unique set of experience and knowledge
00:35:54that I would bring to FSOC.
00:35:56To highlight a few,
00:35:57they include managing the impact of natural catastrophes
00:36:02and that have devastated communities,
00:36:05placing insurers under supervision,
00:36:07rehabilitation and liquidation,
00:36:10and helping with the development of IT systems
00:36:14for the state and at the National Association
00:36:16of Insurance Commissioner, also known as the NAIC.
00:36:19I also assisted in starting up
00:36:21residual market mechanisms in Hawaii
00:36:24when the availability of insurance during hard markets
00:36:28was limited or non-existent.
00:36:31I worked closely with fellow state
00:36:33and international regulators, insurers, agents,
00:36:37legislators, and consumer groups
00:36:39to ensure the insurance marketplace remains fair,
00:36:44viable, and responsive,
00:36:47and that companies are financially solvent
00:36:49and there to pay claims.
00:36:52I know the important role of state regulators,
00:36:55insurance regulators play,
00:36:56and the benefit of collaboration
00:36:58on important questions of financial regulation.
00:37:02The three-part statutory mission of FSOC
00:37:05is to identify risks to financial stability
00:37:08of the United States, promote market discipline,
00:37:11and respond to emerging threats
00:37:14to the stability of the US financial system.
00:37:18If confirmed, I will work every day
00:37:21to share my experience and insight
00:37:23with fellow FSOC members to help the organization
00:37:27achieve the mission Congress gave it.
00:37:30Thank you for the opportunity to appear here today.
00:37:33I look forward to answering any questions you may have.
00:37:37Thank you, Mr. Ito.
00:37:38I would express the opinion
00:37:40that Joy probably made the right choice
00:37:42and we will not keep you long so you can catch up.
00:37:45I'm glad to report that they made it safely
00:37:47to their destination.
00:37:48I'm not suggesting what my colleagues ask about,
00:37:52but you may not get the most questions on this panel,
00:37:54but nonetheless, you should stay here for the entire panel.
00:37:58But then again, I don't know where you're going
00:38:01on your vacation, so thank you all.
00:38:06I'll start with you, Ms. Goldsmith-Romero.
00:38:07FDIC suffered from significant
00:38:09longstanding workplace culture issues.
00:38:12It's been described as misogynistic,
00:38:14patriarchal, insular, outdated, good old boys club.
00:38:18Significant change is necessary
00:38:20because FDIC employees deserve a workplace
00:38:23free from discrimination and abuse and harassment.
00:38:26How do you go about addressing these longstanding issues
00:38:29that appear to be deeply ingrained
00:38:32through FDIC chairs of both parties for far too many years
00:38:36did seem to be ingrained in the agency's culture?
00:38:40Thank you for the question, Senator.
00:38:41I mean, when I read the report,
00:38:43it reads like a bygone era,
00:38:45particularly for women and minorities
00:38:48and members of the LGBTQ plus community.
00:38:51So I'll learn more if confirmed and I can get in there,
00:38:55but let me give you my top line thoughts.
00:38:58The first is to modernize the federal workplace,
00:39:02to one that has the best practices
00:39:04that you would expect to see in federal workplaces,
00:39:07that invests in staff morale and values
00:39:09and supports employees.
00:39:11The second is to herald the employees and managers
00:39:14that have been doing the right thing.
00:39:16Third, I'd send a clear message that harassment
00:39:18and discrimination and retaliation will not be tolerated.
00:39:22So that includes investigations
00:39:24and holding people accountable.
00:39:26And I can say that the conduct in the report
00:39:29would warrant multiple removals.
00:39:32Additionally, we need to put in place
00:39:34what is the normal standard federal EEO process
00:39:39for complaints, and then encourage people to use it
00:39:41rather than have them live in fear.
00:39:43I would change the litigation adverse culture
00:39:47so that problems could be addressed right away
00:39:50rather than moved around
00:39:51or kicked the can down the road.
00:39:54And then the error of each office being a fiefdom
00:39:58would be over.
00:39:59There would not be 70 plus FDICs.
00:40:01There'd be one FDIC with all employees in all offices
00:40:04following the same rules, the same way.
00:40:07Thank you.
00:40:10Discuss how your tenure as did SIGTARP
00:40:15informed your understanding of our banking system
00:40:19and prepared you to lead the FDIC
00:40:21into its next much better chapter.
00:40:25Yeah, thank you, Senator.
00:40:26SIGTARP was really deep into banks at the worst time
00:40:30in our nation's history.
00:40:31We were with inside the same confidential
00:40:35supervisory privilege that FDIC and other regulators hold.
00:40:38And so we were dealing with failed banks all the time
00:40:41and banks that were in trouble.
00:40:42So we are actively monitoring all of the 700 plus banks
00:40:46in TARP, making recommendations to treasury.
00:40:49A lot of those were community banks
00:40:51that were having trouble getting out of TARP.
00:40:53And we were following all of that
00:40:55and following their health and condition.
00:40:58In terms of our investigations,
00:41:00we prosecuted more than 100 bankers,
00:41:02more than 90 bank borrowers who hurt banks.
00:41:04And so we would go in into banks
00:41:08just like a bank examiner does.
00:41:09We would analyze all the bank's books and records,
00:41:12the examiner's records, we'd be talking to banks,
00:41:15employees and management, as well as the examiners.
00:41:18We'd be using our proactive data analytics based system
00:41:21to trend out call reports
00:41:23and be looking at camel's ratings
00:41:24and really trying to identify areas of risk,
00:41:28how banks were managing with risk
00:41:30and then whether they were following
00:41:32the regulatory rules or not.
00:41:35And then on the largest banks,
00:41:36I did a lot of work on systemic risk,
00:41:38capital, liquidity issues, things like that,
00:41:41and then served on a council of IGs
00:41:43with oversight over FSOC.
00:41:45Thank you.
00:41:47Listening to you, having talked to you before,
00:41:49and I know you talked to a number of senators
00:41:51of both parties and looking at your experience
00:41:54and background says to me, there is no question,
00:41:57there is no real reason to oppose you
00:41:59except for partisan reasons.
00:42:01And I hope the committee rises above that.
00:42:04Ms. Crenshaw, I'm running up against the clock.
00:42:08We'll have time for one question to her.
00:42:10Mr. Johnson, Ms. Johnson, Mr. Hito, I apologize for that.
00:42:13We will get you written questions.
00:42:15Ms. Crenshaw, Americans become more involved
00:42:17in financial market in recent years
00:42:19as workers become responsible for saving
00:42:21for their own retirements.
00:42:22That's a whole nother debate,
00:42:24but the system's often rigged for Wall Street
00:42:27and against everyone else.
00:42:28We know that most of inflation in this country
00:42:30is because of corporate greed.
00:42:32We see all kinds of signs of this as a system
00:42:36for Wall Street more than for workers.
00:42:38What steps does SEC need to take to make sure
00:42:43Americans have the tools and the information they need
00:42:45to feel confident they'll be treated fairly
00:42:47as they save for the future?
00:42:50Thank you.
00:42:51Yeah, the fact that Americans' retirement
00:42:52is in their own hands more than ever
00:42:54means that the SEC must promote trust in our markets.
00:42:58We do that by reducing bad actors,
00:43:01ensuring truthful and appropriate disclosures,
00:43:04and making sure that market participants
00:43:06play by the rules, all of them.
00:43:08This helps maintain confidence in the markets
00:43:10so investors know it's a safe place to put their money.
00:43:13Thank you.
00:43:14Senator?
00:43:14Thank you, Commissioner Goldsmith-Romero.
00:43:17Thank you once again for the conversation we had,
00:43:19and I told you then I was gonna ask you these questions
00:43:22so they're not a surprise to you
00:43:23if so ever give you an opportunity
00:43:24to deal with some of the challenges.
00:43:26Unlike the chairman who suggests the only reason
00:43:28to vote against someone on this committee
00:43:30is because of partisan reasons,
00:43:32that's just hogwash, to be blunt.
00:43:34The truth is that the whistleblower complaints,
00:43:36and I think the whistleblowers would actually disagree
00:43:38with the chairman's comments as well,
00:43:40whistleblower complaints suggest that the same challenges
00:43:43that we see at the FDIC under Grunberg,
00:43:45some of those same challenges exist
00:43:47with SIGTAR under your leadership.
00:43:49And so my question to you is,
00:43:50how would you respond to some of the challenges
00:43:52that we've talked about in my office?
00:43:54Thank you, Senator.
00:43:55I really do appreciate the time to address this.
00:43:58I absolutely disagree.
00:44:00There's nothing like what was in the Clery report
00:44:03at the FDIC.
00:44:05We had, and I was very glad to have this,
00:44:08a very independent and fair process
00:44:11that employees could go to,
00:44:12and they felt safe going to, and they did.
00:44:15And I'm glad they did because then as management,
00:44:17we could see what the issues were that we had to address.
00:44:20We never had any women complaining about sexual harassment.
00:44:25We never had these issues of retaliation.
00:44:29I was responsible.
00:44:30If there had been discrimination, harassment, retaliation,
00:44:33I would have taken this seriously
00:44:34and dealt with it right away.
00:44:36The findings were, and I have to respect the process,
00:44:39but also the outcome.
00:44:40In 11 years, there was only one finding against the agency.
00:44:45It was early on in my tenure,
00:44:47and I took it very seriously and addressed it.
00:44:49I'll also say that all IGs and their senior staff
00:44:53are held to a very, very high standard
00:44:56because we fall under the oversight of CIGI.
00:44:59And so CIGI has an integrity committee
00:45:01that will do reports and investigations on IGs,
00:45:04and they never had any findings.
00:45:06But even without having discrimination
00:45:09or retaliation or harassment,
00:45:11what I can tell you is that I still cared
00:45:13about employee morale
00:45:15and trying to have employees feel supported
00:45:19We just created this environment of high dignity
00:45:23and professionalism and respect
00:45:25so that employees could bring their best selves to work
00:45:29and work like a team.
00:45:29And the senior staff shared those same values.
00:45:32And I believe that's reflected in the great success
00:45:35that CIGTARP had.
00:45:36We were a very small agency compared to the mission
00:45:40that we had to take on.
00:45:42So everyone was pulling together
00:45:43and we were able to have that success
00:45:46and protect the financial system.
00:45:49So that's why I wanna go to the FDIC
00:45:51and do the same thing there.
00:45:53Can you confirm for me that you've had no complaints
00:45:56filed against you specifically
00:45:58for discrimination, harassment or retaliation?
00:46:01Senator, I think it would be very normal
00:46:04to name me in any kind of complaints.
00:46:07And I would welcome that
00:46:08because I'm ultimately the one responsible
00:46:11for changing things and fixing things right away.
00:46:15So the buck stops with me.
00:46:17And so I would be named,
00:46:19that would be very normal thing
00:46:20to name all the managers all the way up.
00:46:22But in my 11 years, we only had this one finding early on.
00:46:27I'm certainly familiar with the concept
00:46:28that there are three sides to every story,
00:46:30yours, mine and the truth.
00:46:31And so I certainly appreciate you answering that question.
00:46:34In my office, we also talked about the importance
00:46:36of trying to find a way for the employees,
00:46:38especially at the FDIC and beyond
00:46:40that have had challenges within the organization
00:46:43to be able to go forward with complaints
00:46:46but not go forward with complaints
00:46:47and the same with organization that actually manages.
00:46:51So under Chair Grubenberg, he has a recent proposal
00:46:55creating the FDIC's Office of Professional Conduct
00:46:58and Office of Equal Employment Opportunity.
00:47:01Of course, the challenge is that all those reports,
00:47:04complaints and concerns come straight back to the chair.
00:47:08How would you create a culture
00:47:09where the person who is handling the complaints
00:47:12isn't a part of the organization itself?
00:47:16Thank you, Senator.
00:47:17I really do appreciate that you and I had some time
00:47:19to talk about the importance
00:47:21of having an independent and fair process.
00:47:24So in the federal government, the EEOC sets that up.
00:47:27There's various agencies
00:47:29for different kinds of allegations,
00:47:32but the EEOC sets that up and works with the agencies
00:47:36to do that in a way where the investigations
00:47:41can be investigated
00:47:43so that there's no influence on the fact finder.
00:47:45These are the types of things
00:47:47that are important, that independence.
00:47:51Do you have state supervisory experience?
00:47:55So, Senator, I have worked a lot
00:47:57with the state banking regulators quite a bit.
00:48:00In fact, Pierce Bank in Washington,
00:48:05we were able to go in with the state banking regulators
00:48:09for years that we did, working hand-in-hand.
00:48:12We ultimately found why the bank failed,
00:48:16uncovered the cause of it,
00:48:17and then we brought significant convictions in that case.
00:48:22I believe 15 bankers who were convicted.
00:48:26We were working hand-in-hand
00:48:27with the state banking regulators.
00:48:28So you do believe that your nomination
00:48:30comports with the FDI Act?
00:48:36Are you talking about to have the banking supervisor?
00:48:39So I'm not, if the way it's written,
00:48:43I understand the issue there, I believe.
00:48:45If the way it's written is that someone
00:48:47who has to have worked in a state banking regulator,
00:48:51I have not done that.
00:48:53I've just worked with the state banking regulators.
00:48:56That was just one example.
00:48:57Okay, thank you.
00:48:58Thank you, Senator Scott.
00:48:59Senator Smith of Minnesota is recognized.
00:49:01Thank you, Chair Brown and Ranking Member,
00:49:03and welcome to all of you.
00:49:04Thank you very much for your willingness to serve.
00:49:07I'm very grateful for that.
00:49:10Ms. Crenshaw, I'm gonna start with you.
00:49:12I think one of the things that I see
00:49:15is that retail investing has just changed dramatically.
00:49:19It's really almost unrecognizable
00:49:20for what it was even 10 years ago.
00:49:22Smartphones, the capacity for people to trade
00:49:26is so easily accessible.
00:49:27Social media has become a way to draw people into new schemes
00:49:32and as a result, I think retail investors' appetite
00:49:36and access to new and more sophisticated financial products
00:49:41is growing and quite dramatic.
00:49:43So could you talk to us, please,
00:49:45about how you view the SEC's role
00:49:48in protecting retail investors and maintaining fair markets,
00:49:51particularly in the face of the evolving investment
00:49:56environment?
00:49:58Absolutely, thank you, Senator.
00:50:00First and foremost, I think education
00:50:01is fundamentally important.
00:50:04We need to educate investors on how to assess
00:50:07the pros and cons of various investments,
00:50:08of how to assess the risks and opportunities
00:50:11that different investments opportunities provide.
00:50:14So first and foremost, I would start with that.
00:50:16Second, we need to ensure that the intermediaries
00:50:19are abiding by their obligations,
00:50:21the investment advisors, the broker-dealers,
00:50:24and ensuring that they are abiding
00:50:28by their fiduciary obligations
00:50:31or the regulation best interest.
00:50:34And we need to ensure that we hold bad actors to account
00:50:38so that there is faith in the market.
00:50:40So really accountability and transparency,
00:50:43I think, are the fundamental ways
00:50:45that we need to ensure that those retail investors,
00:50:48which is good, we want to encourage retail investors,
00:50:50because again, retirement is in their hands more than ever,
00:50:54but we do need to ensure that it's a safe place for them
00:50:56so that they have more returns when they get their money out
00:50:59than they did when they started.
00:51:00Thank you very much.
00:51:01I think just as a follow-up,
00:51:02I think that oftentimes there is some confusion
00:51:07about whether these new investment tools or products
00:51:10still have to abide by the same consumer protection rules
00:51:15that we have in place.
00:51:16Could you just address that?
00:51:17Because I think that creates,
00:51:19and sometimes it seems to create nearly a loophole,
00:51:22and how would you approach that at the SEC?
00:51:25Absolutely.
00:51:26I think to the degree they are securities,
00:51:28they must abide by all of the securities laws
00:51:31and regulations.
00:51:33And I think it's as straightforward as that.
00:51:34And when they are not,
00:51:35we have enforcement tools to hold them to account.
00:51:38I think that's also where education comes into account,
00:51:42both for investors, but for the marketplace.
00:51:44For example, ETPs are very different from ETFs.
00:51:48And you hear a lot about ETFs.
00:51:50They're ubiquitous in retirement accounts.
00:51:53We've recently passed some ETPs.
00:51:55They are not ETFs.
00:51:56The protections around them are incredibly different.
00:51:58And both the marketplace and the investors
00:52:00need to understand what their obligations are.
00:52:02Great, thank you very much.
00:52:04Thank you very much.
00:52:06Commissioner Goldsmith-Romero,
00:52:07I really appreciated the conversation that we had
00:52:10and appreciated very much the professionalism
00:52:13and the deep bench of experience
00:52:16that you bring to this extremely important role.
00:52:19And I know that Chair Brown asked you
00:52:22about the ways in which your experience at TARP
00:52:26will shape your leadership at the FDIC
00:52:29and Chair Brown, I found that very, very helpful.
00:52:33So I'm gonna just briefly follow up
00:52:34on a bit of what ranking member was asking.
00:52:39As you tackle the need for culture change
00:52:42and accountability at FDIC,
00:52:44I for one think that somebody with a fresh perspective,
00:52:47somebody who is not part of that culture,
00:52:49but is coming in,
00:52:51can provide the kind of leadership that's needed.
00:52:55And so could you just address that for me?
00:52:57And could you talk a bit about how you see
00:53:02coming in as a new person in an agency
00:53:04that needs culture change,
00:53:05which is very difficult to do, let's be honest,
00:53:07how you see approaching that?
00:53:10Thank you, Senator, I appreciate the question.
00:53:13So I've been in the federal government for 22 years,
00:53:15so I know what is right and what is good.
00:53:18And what I'm reading here in this report is not that.
00:53:22It's not that at all.
00:53:22And I've had the great opportunity to work
00:53:25at three different agencies
00:53:26and lead a federal office for 11 years.
00:53:29So it's not everybody there.
00:53:32There's, I'm sure, a great number of people
00:53:34who are doing the right thing.
00:53:36And here the agency's reputation is tarnished.
00:53:39So I'm gonna go in and go back to reestablishing the FDIC
00:53:43as being a premier regulator.
00:53:45Like I said, herald the people
00:53:47who are doing the right thing,
00:53:49put in all the normal processes, procedures, best practices
00:53:52that I have enjoyed and led,
00:53:55and make sure that everyone feels safe
00:53:58and can be focused on mission.
00:53:59Thank you, I appreciate that answer.
00:54:01And I think, again, it demonstrates how your experience
00:54:03will allow you to be an effective leader
00:54:06in a very important agency.
00:54:07Thank you, Mr. Chair.
00:54:08Thanks, Senator Smith.
00:54:09Senator Rounds from South Dakota is recognized.
00:54:12Thank you, Mr. Chairman.
00:54:13First of all, to all of you and to your families,
00:54:15thank you for being here.
00:54:17To the families, this can be a pretty emotional time period
00:54:20for the folks that are up here in front
00:54:22because they don't have any idea at all
00:54:23what kind of questions they're really gonna get.
00:54:25They've had a chance to meet with most of us beforehand
00:54:27and they get an idea about what it is,
00:54:29but there's always that trepidation.
00:54:32And you all get to put up with them during that time period.
00:54:34So we thank you for that.
00:54:39Ms. Johnson and Mr. Ito, thank you for being here.
00:54:42I'm not gonna have any questions for either one of you too,
00:54:45so you can relax for just a minute here.
00:54:48Ms. Romero, appreciate the opportunity to visit with you.
00:54:53As you know, the federal banking agencies,
00:54:56including the FDIC, have proposed a comprehensive revision
00:55:00to their capital rules that would substantially
00:55:03increase capital requirements.
00:55:05This revision is known as the Basel III End Game,
00:55:08and we talk about it a lot within the banking institutions,
00:55:11but not a lot outside.
00:55:14We know that there will be material changes
00:55:16made to the entire proposal.
00:55:18Just Tuesday, Chair Powell says that he supports
00:55:21another comment period.
00:55:23If confirmed, would you support another comment period?
00:55:28Thank you, and I really appreciated
00:55:30when we met in your office and were able to talk through
00:55:32some of these deep, complex issues.
00:55:34I think a re-proposal is always on the table
00:55:37when you have a rule that's proposed
00:55:40and you get that many negative comments.
00:55:42And so, there is the Administrative Procedures Act
00:55:46and the Logical Outgrowth Doctrine
00:55:48that would have to be applied,
00:55:50but I'm not, I think it's on the table.
00:55:52I'm not looking to get something done fast,
00:55:54I'm looking to get something done right.
00:55:56Okay, look, in this particular case,
00:55:59you would be expected to make a decision rather quickly
00:56:03as to whether or not that's going to occur.
00:56:06Your nomination is up right now,
00:56:08and they're in the middle of making this decision right now.
00:56:11So, you're going to be put in a really tough position here,
00:56:14and if you haven't done the background
00:56:16to decide whether or not you would support
00:56:19a continuation or not, that's going to be a problem.
00:56:24Well, Senator, I'm not, I've done the background
00:56:27on what's going on with Basel.
00:56:28I'm just not privy to the changes that are being made,
00:56:31and do they fall within the Logical Outgrowth Doctrine,
00:56:34do they not?
00:56:35But what I can assure you is,
00:56:37I am very open to a re-proposal,
00:56:40but if confirmed, I would need to get in there
00:56:42and sort of understand this,
00:56:43but I'm not looking to rush something through
00:56:47for the sake of rushing it through.
00:56:48I'm looking to make sure that the regulation is long-lasting,
00:56:51it's going to work,
00:56:52and I want to understand all the unintended consequences.
00:56:54There is another possibility on that,
00:56:56because that decision is going to be made very, very shortly.
00:56:59And I recognize that they're asking you
00:57:00to move into a position rather quickly
00:57:02in this particular case.
00:57:05If you are confirmed,
00:57:08and we need to move forward quickly
00:57:11in this particular case, just because of the timing.
00:57:13This has been around for a long time,
00:57:14but it's coming up now.
00:57:16Would you recuse yourself from voting
00:57:18and allow Vice Chair Hill to finish the work
00:57:20on the Basel III endgame proposal?
00:57:22Would you commit to that?
00:57:25Senator, I think if I'm confirmed as chair,
00:57:30there'll be a decision made at the board level.
00:57:33I don't see a reason to recuse,
00:57:35but I can tell you what I'm trying to explain
00:57:37is I haven't seen the changes.
00:57:39I'm certainly inclined to have a re-proposal
00:57:43whenever there are this many comments,
00:57:45and then there's going to be broad material changes.
00:57:48That's my inclination.
00:57:49The broad material changes appear to be necessary
00:57:52if this is going to move forward at all.
00:57:53I think that's pretty clear,
00:57:54because I think over 95% of all the requests
00:57:57recommended making major changes
00:57:59in multiple different areas on it.
00:58:01Okay, in light of the, Ms. Romero,
00:58:04in light of the recent Supreme Court ruling
00:58:06on Chevron deference,
00:58:08agencies like the FDIC will need to make certain
00:58:11that they are complying with congressional intent.
00:58:15If confirmed, do you commit to implementing
00:58:17the Economic Growth, Regulatory Relief,
00:58:19and Consumer Protection Act, that's S2155,
00:58:23as intended by Congress?
00:58:25I'm just curious.
00:58:28This really is a case of where there has been
00:58:32a rulemaking change in the way that it's going to be viewed
00:58:35in the future by the court.
00:58:38Intent is really going to be important.
00:58:41Give us your thoughts.
00:58:44Yeah, thank you for that question, Senator.
00:58:46Yeah, I really believe in that we are limited as regulators
00:58:50to the laws that are before us,
00:58:52and we always strive to look at congressional intent.
00:58:55Everything I do now is to sort of say,
00:58:57okay, well, what's the authorization here from Congress,
00:58:59and how do we stick with it?
00:59:01S2155 is the law of the land.
00:59:03I'm gonna comply with it.
00:59:04I really believe in the sentiments behind it
00:59:07in terms of tailoring regulation.
00:59:10As we talked about it, all banks are not the same.
00:59:12And I also wanna understand the unintended consequences
00:59:15of all these rules.
00:59:16So I just, if confirmed,
00:59:19would you commit to consulting with Congress
00:59:22if you view intent is not clear?
00:59:25100%, Senator.
00:59:26Thank you.
00:59:27Thank you, Ms. Chairman.
00:59:28My time is expired.
00:59:29Thank you, Senator Rounds.
00:59:30That's Senator Warren of Virginia.
00:59:31Thank you, Mr. Chairman.
00:59:32Let me actually pick up where my friend from South Dakota.
00:59:35As somebody, unfortunately,
00:59:37with some folks on my side of the dais,
00:59:41I was up to my eyeballs in S2155.
00:59:44So if you need intent suggestions,
00:59:49I'd be happy to share those with you.
00:59:53But I also have to say-
00:59:54On a bipartisan basis.
00:59:54On a bipartisan basis.
00:59:56Although, you know, we ought to go to the,
00:59:58they ought to, she ought to go first
00:59:59to the people who took the most grief for that.
01:00:01And I also think, you know,
01:00:04your comment, Ms. Goldsman-Thorne-Merrill,
01:00:05Commissioner, on Basel III was appropriate,
01:00:09absolutely appropriate.
01:00:10And the fact that you think, you know,
01:00:13you've not been told about,
01:00:15just as we've not been told about
01:00:16what the reworkings are gonna be
01:00:18and whether that needs to be fully reissued
01:00:22or additional comment period.
01:00:23I mean, I think it would be irresponsible
01:00:25to make a judgment when you, just like me,
01:00:28has not seen the revisions yet.
01:00:30So I think, and based on our conversations,
01:00:34you understood the complexity of this issue.
01:00:37And, you know, we all think
01:00:41how we deal with Basel III is terribly,
01:00:44the endgame, terribly important.
01:00:45And, you know, having the full economic analysis out,
01:00:48the chair, Chair Powell, committed to that yesterday,
01:00:51and making sure whatever direction we had,
01:00:55you know, that it works in harmony
01:00:57with already existing standards,
01:00:59I think is really important.
01:01:00I appreciate the way you've addressed this.
01:01:02And I know members have already asked this,
01:01:04but I wanna go at it again since it appears
01:01:07some of my colleagues have questions about,
01:01:09you know, your background experience.
01:01:11I think you've got the right background.
01:01:13I think you've got the right experience.
01:01:16You know, but the truth is, you know,
01:01:18FDIC's a large entity.
01:01:21It is very complicated.
01:01:24And you're gonna have a challenge to
01:01:28you know, both keep the trains running on time,
01:01:32and, you know, not move away from your critical
01:01:36financial supervisory role.
01:01:38So, can you give us a little bit of outline,
01:01:41recognizing you're not there yet,
01:01:42but can we look at 30 day metrics, 60 day metrics,
01:01:4590 day, you know, what are the things
01:01:47that we could see from you,
01:01:49particularly on the culture change,
01:01:51that, you know, I hope you can be confirmed,
01:01:54that we could look back and say,
01:01:56well, did she do what she said as she came into this role?
01:02:00Yeah, thank you, Senator.
01:02:01I appreciate the opportunity to address that.
01:02:03So, I think there's gonna be some immediate things
01:02:05that need to take place in that.
01:02:07The first of that is making sure
01:02:08that there's the right process in place.
01:02:10Because there was confusion in the process,
01:02:12and also making sure employees feel safe,
01:02:14and all the managers are encouraging people
01:02:18to use that process.
01:02:18Otherwise, if you don't have a process in place
01:02:21that people trust, then, you know,
01:02:24management does not know what's going on,
01:02:26and can't fix the problem.
01:02:27So, that's one of the first things
01:02:28that would need to be fixed.
01:02:30I think this issue of field offices and fiefdoms,
01:02:34that's gonna take a little bit longer, I would say.
01:02:37You know, as I said before,
01:02:39we had field offices at SIGTARP,
01:02:40and I made sure, I did a number of things
01:02:42to make sure that all the offices were operating
01:02:44in the exact same way,
01:02:47in terms of conduct and professionalism,
01:02:49but also in terms of substance, and what they're doing.
01:02:51We can't have offices moving in a different direction
01:02:55than, for example, what the policies,
01:02:57and practices, and procedures allow.
01:03:00So, that's gonna be a larger issue.
01:03:03There's definitely gonna be accountability,
01:03:06and that might take a little bit of time,
01:03:08but we wanna do it right.
01:03:10We wanna make sure we go in and right the ship.
01:03:13And then, there's really just this issue
01:03:15of modernizing culture, and modernizing ideas,
01:03:19changing litigation adverse mentality.
01:03:22I think we could do some things right at the beginning
01:03:24to start with that,
01:03:25but these are deep-seated, fully ingrained issues.
01:03:29Some of changing the whole culture
01:03:30is gonna take a bit of time,
01:03:32but we also, we can't take our eye off the ball
01:03:36of the mission.
01:03:37And so, you know, we had bank failures in spring 2023.
01:03:40We've gotta make sure that everyone's in position,
01:03:43and can be focused on mission.
01:03:45And I, again, agree with the chairman.
01:03:49This was not a problem at the FDIC that happened overnight.
01:03:52It is gonna take time, but I'm, you know,
01:03:54my hope would be we'd see a 90-day plan,
01:03:57180-day plan, and some of the things
01:03:59that we can look at at metrics.
01:04:01I'm gonna get one more question to you, Commissioner,
01:04:06but I do wanna say, just crunched off of the record,
01:04:09I'd love to both compliment what, frankly,
01:04:11Jay Clayton started on human capital disclosure,
01:04:13and I know you've been active on that as well,
01:04:16and I wanna make sure we continue that good work.
01:04:18An issue that my colleagues have heard me
01:04:22come back to repeatedly is better utilization
01:04:25of the discount window.
01:04:27Chair Powell in the House yesterday was saying,
01:04:28you know, the fact that they sometimes publish folks
01:04:33ends up creating that stigma.
01:04:35I just, if you get, when you get in,
01:04:38and you come to the same conclusion
01:04:39that discount window needs to be better utilized,
01:04:42and we need reforms, will you continue to work
01:04:45with Chair Powell, me, and others
01:04:46who care about this underutilized tool?
01:04:49Absolutely, I care about it, too.
01:04:50I mean, in times of crisis, banks need liquidity,
01:04:53and they need it fast.
01:04:54We saw liquidity dry up very quickly in the crisis,
01:04:57and that's actually what led to
01:04:59the Troubled Asset Relief Program, or TARP.
01:05:01So we don't wanna be in that same position again.
01:05:03So these ideas on taking away the stigma
01:05:05of the discount window, and then making sure
01:05:07banks are ready to use it, that they can
01:05:09potentially pre-pledge collateral,
01:05:12and that they know how to use it,
01:05:15I think that's worth taking the time to do.
01:05:16Thank you.
01:05:17Thank you, Mr. Chairman.
01:05:18Thanks, Senator Warner.
01:05:19Senator Tillis of North Carolina is recognized.
01:05:21Thank you, Mr. Chair.
01:05:22Congratulations to all of you for your nominations.
01:05:27Commissioner Crenshaw, I wanna start with you.
01:05:29You made a statement after the SEC's recent climate rule,
01:05:34and I think, to use your words,
01:05:37you said, you considered the rule to be the bare minimum,
01:05:41and not the rule I would have written.
01:05:44So I'm curious, with respect to scope three
01:05:48reporting requirements, is that one of the root causes
01:05:51of your disappointment?
01:05:51If you can keep your comments brief, I would appreciate it.
01:05:54Sure, Senator, thank you.
01:05:56With respect to bare minimum, my intent there was-
01:06:00Where did it fall short?
01:06:02It fell short, well, investors.
01:06:05I talked about two places where investors,
01:06:06what I was really thinking about when I said,
01:06:09not the rule I would have written,
01:06:10was I would have thought about using models,
01:06:12assumptions, and estimates much more completely
01:06:15than we did, and that way we could have gotten
01:06:18more information to investors in a way
01:06:20that was less expensive, and I would also have considered
01:06:24robust safe harbors from liability.
01:06:26If confirmed, would you consider reopening the rule?
01:06:32And if you did, would scope three reporting requirements
01:06:35be a part of the revised rule?
01:06:38I don't know, Senator.
01:06:39As you know, it's in litigation right now,
01:06:41so a lot is gonna depend on the outcome of the litigation,
01:06:44and I don't know-
01:06:45Do you generally support the notion
01:06:46of scope three reporting requirements?
01:06:48I think investors had put comments in the comment file,
01:06:52and I think we need to balance the interests,
01:06:54but I think there's a way that you can look at assumptions
01:06:57and estimates and a safe harbor from liability
01:06:59to ensure that the costs are not prohibitive,
01:07:02and to ensure that you're not asking farmers
01:07:04and unregistered entities to provide information.
01:07:06Okay, thank you.
01:07:08Ms. Goldsmith-Romero, I wanna go back
01:07:10to Silicon Valley Bank.
01:07:13What, in your opinion, if you could only,
01:07:15the major root cause of SVB's failure,
01:07:18what cause of SVB's failure, what was it?
01:07:21Was it, well, actually, let me not give you choices.
01:07:25What do you think the root cause of SVB Bank was?
01:07:31Thank you, Senator.
01:07:31For that, failure of risk management at the bank,
01:07:34and then failures on the regulatory supervision.
01:07:38Yeah, so you didn't see capitalization as an issue?
01:07:43I was not a bank regular at that time,
01:07:45but it seemed like the root cause
01:07:47is what you were just asking.
01:07:48Poorly managed and poorly supervised?
01:07:50Correct.
01:07:57And I think as a result, because at the time of the,
01:08:00it seems like it was ages ago.
01:08:02It's hard to believe it hasn't been that long.
01:08:06But at the time of the failure, everybody was saying,
01:08:08and because they failed, so many other banks were failing.
01:08:11Was it your opinion that what we saw there
01:08:14was gonna ripple through?
01:08:15I know we had the one other failure, First Republic,
01:08:19but do you view those, as some of us do,
01:08:22as kind of outliers in the banking industry
01:08:24based on their models and activities?
01:08:28This is a really interesting question.
01:08:30So let me take it back even a little bit farther,
01:08:32which is the crisis.
01:08:33And this really comes down to consumer confidence, right?
01:08:36If consumers don't have confidence
01:08:38that their money is safe, businesses and individuals,
01:08:41then you're gonna see bank runs
01:08:44and you're gonna see contagion.
01:08:45You may have bank runs not even related
01:08:47to the banks who are in trouble.
01:08:48And we don't wanna have that.
01:08:50We don't wanna have people pulling their money
01:08:51out of the bank and putting it
01:08:52in just one of the hugest banks, thinking that it's safe.
01:08:56And so I think there was a situation
01:08:59where there was Silicon Valley Bank and Signature
01:09:01and the regulators tried to contain that.
01:09:05But I do think we need to really be looking deeply
01:09:08at this issue of bank runs and consumer confidence,
01:09:11particularly in modernized banking.
01:09:13I just felt like there was some thinking.
01:09:16A lot of people were attributing the Senate Bill 2155.
01:09:20I was one of four on my side that worked
01:09:22with Senator Warner and others on that bill.
01:09:25They were trying to blame it on just a lack of regulation,
01:09:30but it doesn't really, it seemed like a lack
01:09:32of supervision and a lack of risk management.
01:09:35So I'll move on from there.
01:09:38Kind of curious about your view of the 2024 stress test.
01:09:42I read the results of those stress tests
01:09:44to say that our banks are pretty well capitalized.
01:09:47How do you read the results of those stress tests?
01:09:49Yeah, so again, I'm on the outside looking at it
01:09:53just like you are.
01:09:54And so it does seem like some capital is strong.
01:09:58I think there are some areas that need to be looked at,
01:10:01but that's how I read the stress.
01:10:02But is a stress test, by definition,
01:10:05really subjecting the banks to some of those areas?
01:10:08Do you think that the stress tests themselves
01:10:10are insufficient, or you just need to look at the details
01:10:13within the stress test scenarios?
01:10:15Yeah, I mean, I'm very familiar with stress tests.
01:10:17I mean, it's designed for capital adequacy, and so.
01:10:20And it's literally stressing, so it's coming up
01:10:23with extraordinary circumstances, so.
01:10:25Absolutely, sir, yes.
01:10:27Okay, thank you.
01:10:27Thank you, Mr. Chair.
01:10:29Thank you, Senator Tillis.
01:10:30Senator Warren from Massachusetts.
01:10:32Thank you, Mr. Chairman,
01:10:33and congratulations to all of our nominees.
01:10:36Good to see you here today.
01:10:37So, Commissioner Goldsmith-Romero,
01:10:39as chair of the FDIC, your job would involve
01:10:43not only helping to prevent bank crises,
01:10:46but also cleaning up after them when the banks fail.
01:10:52You've had decades of experience as a financial regulator,
01:10:55including getting up close and personal
01:10:58with teetering banks during your 10 years
01:11:01as head of SIGTARP.
01:11:03In the fallout from the 2008 financial crisis,
01:11:06Congress created a $700 billion fund
01:11:09called the Troubled Asset Relief Program, or TARP.
01:11:13It was designed to stabilize the financial system,
01:11:16and you led the oversight of that huge fund for a decade.
01:11:22You also managed SIGTARP's $45 million operating budget,
01:11:27and its hundreds of staff.
01:11:29By all accounts, you did so with incredible success,
01:11:32recovering over $11 billion for the American people.
01:11:36In fact, I understand that for every dollar
01:11:39your office spent, the American taxpayer got a $29 return.
01:11:46That's pretty good.
01:11:48Commissioner Goldsmith-Romero,
01:11:50your work at SIGTARP required you to review
01:11:53the quality of bank assets,
01:11:55confidential examination reports, management processes,
01:12:00and compliance with federal regulations.
01:12:04So how does that compare with the kind of work
01:12:07a bank examiner does at the OCC, the FDIC,
01:12:12or the Federal Reserve?
01:12:14It's very, very, very similar, Senator.
01:12:17I appreciate that question.
01:12:18So we would go in, just like a bank examiner goes in.
01:12:21In fact, sometimes we'd grab the operating system
01:12:23and go through the banks.
01:12:24We'd look at what led up to the call reports.
01:12:27We'd trend out the call reports.
01:12:28We'd see changes in Camel's ratings.
01:12:30I mean, we would go deep into these banks.
01:12:32I think the difference is that often we had more time
01:12:36to look at these.
01:12:37We dealt with a lot of failed banks, troubled banks.
01:12:40We would determine the cause of the failure,
01:12:42and then when we would determine the cause of the failure,
01:12:44if we could hold some bankers accountable for that,
01:12:47we would seek reimbursement to the FDIC
01:12:50for losses to the deposit insurance fund.
01:12:53That's harder for bank examiners to do this.
01:12:55And then we had a higher standard
01:12:58that we had to prove in doing our work.
01:13:01All right, and that's where your $29 to $1 invested
01:13:05came from, holding these folks accountable.
01:13:08Yeah, this is how we got our great return on investment.
01:13:12Good.
01:13:13You know, this seems like pretty useful experience
01:13:15for the person named to lead the agency
01:13:17in charge of dealing with failed banks.
01:13:19In fact, I can't think of better experience.
01:13:23The last Republican who was named to head the FDIC
01:13:26had no experience in dealing with failed banks.
01:13:30Ms. Goldsmith-Romero, you ran SIGTARP
01:13:33at a time of extraordinary upheaval in the banking industry.
01:13:37Can you estimate how many troubled banks you dealt with?
01:13:42Hundreds.
01:13:42I mean, there was more than 700 banks in TARP.
01:13:46You know, we were constantly working with them,
01:13:48trying to understand their health and their condition
01:13:51and risk that they faced.
01:13:53And then we investigated
01:13:54and went very deep into triple digits.
01:13:57Okay, so you spent years digging through
01:14:00the guts of troubled banks
01:14:02and compliance with banking and securities laws.
01:14:06You kept some open, others you ended up closing,
01:14:09and that experience is pretty much spot on
01:14:13for somebody to lead the agency
01:14:14in charge of monitoring the banks
01:14:16and cleaning up the ones that fail.
01:14:18Commissioner Goldsmith-Romero,
01:14:20we know that there are workplace issues at the FDIC.
01:14:25During your time at SIGTARP,
01:14:27there were some workplace complaints filed.
01:14:31Should that be a red flag
01:14:33that you are not a successful manager?
01:14:36No, Senator, you want to have a process
01:14:39that people feel safe using
01:14:41and that they actually do use
01:14:43and they're not fearful of.
01:14:44And that does not exist at the FDIC.
01:14:47But you also want to look at the results.
01:14:49And in 11 years, we only had one finding against us
01:14:53early in my tenure,
01:14:55and I took it seriously and addressed it.
01:14:56So ultimately, what you want
01:14:58is to set up an environment of high dignity,
01:15:00professionalism, respect,
01:15:02employees feel supported and valued
01:15:04so that they'll come in and they'll give 110%,
01:15:07and that's how we got such great results at SIGTARP.
01:15:10Yeah, well, I very much appreciate
01:15:12both that you have thought through these issues
01:15:15and actually have extensive experience with it.
01:15:18These are critically important economic positions
01:15:21that the nominees before us are eminently qualified to fill.
01:15:26I'm sorry, I don't have time to talk with everyone,
01:15:28but I really appreciate your work here.
01:15:30Thank you, Mr. Chairman.
01:15:32Thank you, Senator Warren.
01:15:33Senator Kennedy from Louisiana.
01:15:38Thank you, Mr. Chairman.
01:15:41Ms. Romero,
01:15:46I know you've read the Cleary Gottlieb report,
01:15:50is that correct?
01:15:51Yes, Senator.
01:15:54I've watched a lot of powerful people in this town
01:15:59try to cover it up.
01:16:02They said, oh, it's bad, but don't worry.
01:16:06The FDIC chairman will fix it.
01:16:11This was the same FDIC chairman
01:16:15who had been at the agency since God was a corporal
01:16:19and under whom all this stuff happened.
01:16:23And fortunately, that point of view didn't prevail.
01:16:28Here's the way I read the report.
01:16:3197 people at that agency reported 145 separate incidents
01:16:37of sexual assaults.
01:16:3991 others reported 141 separate incidents
01:16:44of gender or sexuality-based discrimination.
01:16:47187 people reported 320 separate incidents of verbal abuse.
01:16:56Over 500 people, about 10% of the people at the agency
01:17:01came forward about discrimination, harassment,
01:17:04mistreatment they faced at the FDIC.
01:17:10Now, I listened to you say all the right words.
01:17:14And you talked about accountability.
01:17:17And you talked about refurbishing
01:17:20the tarnished reputation of the agents.
01:17:25And you talked about listening.
01:17:27And I appreciate all that.
01:17:30But the phrase that got my attention was,
01:17:32send a clear message that this won't be tolerated.
01:17:36If you wanna do that, what you need to do
01:17:40before you do your listening tours
01:17:43or all that other stuff,
01:17:45you need to investigate every one of these allegations,
01:17:50every single one, and find out if they're true.
01:17:55And if they are true,
01:17:57then somebody oughta be the person who's responsible,
01:18:01should be fired,
01:18:03should be sued,
01:18:06and or should be prosecuted.
01:18:10And then you'll have a cleaner agency.
01:18:14Now, I don't have any questions.
01:18:17You're either gonna do it or you're not.
01:18:20But I think a lot of the members of the committee
01:18:23agree with me, we're gonna be watching.
01:18:26Every time the FDIC comes before the banking committee
01:18:29as long as I'm on it,
01:18:30I'm gonna ask you about progress with specificity.
01:18:36Ms. Crenshaw,
01:18:40this climate risk disclosure rule
01:18:47that you're so proud of,
01:18:50how much is that gonna cost
01:18:52the companies that you regulate?
01:18:54Senator, on a per issuer basis over 10 years,
01:18:59I think the economic analysis was roughly $250,000
01:19:03to $750,000 on a per issuer basis over 10 years.
01:19:09What's the total cost, please?
01:19:11I don't know the total cost.
01:19:12Do you have no idea?
01:19:14Well, it's gonna depend very much
01:19:15on the individual issuer.
01:19:17So you impose this rule on the individual issuer?
01:19:19Yes, I do.
01:19:20I do.
01:19:21It depends on the individual issuer.
01:19:23So you impose this rule on every single entity
01:19:27that you regulate and you don't know the total cost?
01:19:30Well, Senator, it depends on the individual issuer.
01:19:31We put in place-
01:19:32You don't know the total cost?
01:19:35It's gonna depend on the individual issuer.
01:19:36You don't know, do you?
01:19:38Because it's gonna depend,
01:19:39I don't think there's necessarily-
01:19:40It's gonna be billions of dollars, isn't it?
01:19:42I don't believe on a per issuer basis
01:19:44that it's going to be-
01:19:45I didn't say per issue, I mean the total cost.
01:19:49Senator, on-
01:19:50It's gonna be billions of dollars, isn't it?
01:19:51I don't know, Senator.
01:19:53Yeah, it is.
01:19:53And you know it is.
01:19:56How much, after asking all these businesses
01:20:00to spend billions of dollars,
01:20:04how much is that gonna lower world temperatures?
01:20:07I don't know.
01:20:08It's not designed to global,
01:20:09it's not designed to lower temperatures, Senator.
01:20:11It's designed to give investors information
01:20:15so that they can assess risk-
01:20:16Why don't you just send them an email?
01:20:19Well, I think there's a lot of securities laws
01:20:21that would prohibit us just sending an email.
01:20:23Let me be sure I understand.
01:20:24You voted to spend-
01:20:26Look, we all want clean air and bright water.
01:20:30You voted to spend, to require the people regulated
01:20:34and the entities regulated by the FDIC
01:20:37billions and billions of dollars,
01:20:40even though you can't say really how much it's gonna cost,
01:20:42you're just gonna make them do it.
01:20:44And you can't tell me today
01:20:45how much it's gonna lower world temperatures?
01:20:48Again, that's not what the rule's designed for, Senator.
01:20:51Well, what's it designed for?
01:20:53It's designed-
01:20:53To harass people?
01:20:54To give investors information to assess risk-
01:20:57Virtue signaling?
01:20:58To appropriately allocate their capital.
01:21:01I mean, this is insanity.
01:21:04You have a personal supply chain.
01:21:07Suppose we passed a law that said,
01:21:10periodically, you've gotta report personally
01:21:15the carbon emissions of the people
01:21:21who make all the clothes you buy.
01:21:22You buy clothes, don't you?
01:21:24I do, Senator.
01:21:25And the car you drive, and the house you live in,
01:21:30and the food you eat, how much do you think that would cost?
01:21:34We carved out all of the smaller entities,
01:21:37EGCs, SRCs, from the final rule to ensure that-
01:21:41If you think everybody ought to report,
01:21:42why don't you make this rule applicable
01:21:44to everybody at the SEC personally,
01:21:47and see how they like it?
01:21:48Again, we carved out the smallest.
01:21:50We took into account the comment file,
01:21:52and we tried to-
01:21:53Tell me again how much this is gonna lower
01:21:55world temperatures.
01:21:56I don't know if I remember asking you.
01:21:57I think you know the answer to that, Senator Kennedy.
01:21:59Zero.
01:22:00Your time has expired, Senator Cortez-Mast.
01:22:02I was reckoning.
01:22:03Thank you, Mr. Chair.
01:22:04Ms. Crenshaw, unfortunately, you weren't able
01:22:06to answer the questions that were asked you.
01:22:08Are there any that you would like to respond to,
01:22:10particularly the total cost amount?
01:22:12You were trying to explain why you couldn't
01:22:13put a total cost to it.
01:22:16Thank you, Senator.
01:22:17It really depends on the individual issuer,
01:22:20and we put in, in the final rule,
01:22:22some phased-in compliance dates.
01:22:25We really catered it to and balanced it
01:22:29to what we thought was appropriate
01:22:30based on the comment file,
01:22:31so smaller reporting companies, emerging growth companies
01:22:34do not have the same obligations
01:22:36that some of the larger issuers have,
01:22:38and thus, really, the cost is going to depend
01:22:41on the size of the issuer at any given moment,
01:22:43who's in which category, and again,
01:22:45it's much more accurate to look at it
01:22:48on a per-issuer basis, in my view.
01:22:49Thank you.
01:22:51I will say this, also, about your background,
01:22:53and I appreciate your public service at the SEIC.
01:22:57I also appreciate your military service
01:23:00as a captain in the United States Army Reserve
01:23:03and at the Judge Advocate General Corps.
01:23:05Thank you very much.
01:23:06You have been a leader.
01:23:08This has been my focus and some on this committee,
01:23:11and ensuring that the men and women who serve our country
01:23:12don't get taken advantage of by scammers,
01:23:15and I appreciate your work there.
01:23:18There is one case that I have been following,
01:23:20and it's the case against Kaz Crafty,
01:23:24an Army financial counselor who used his position
01:23:28to manipulate grieving Gold Star families
01:23:31by directing them to transfer their benefits
01:23:35into brokerage accounts he managed
01:23:37and made commissions off of
01:23:39outside of his official duties.
01:23:41What more do you think the SEC can do
01:23:43to protect members of the military and their families
01:23:45from being victims of scammers like this?
01:23:50Thank you, and I haven't said this today.
01:23:51I actually just got picked up for a major, so I don't know.
01:23:54Congratulations.
01:23:55I will be promoted in the military at some point.
01:23:57Thank you.
01:23:58So first and foremost, I think we need to impose
01:24:01harsher penalties for frauds and scams
01:24:03that target our military.
01:24:05We need to make sure that there's a cost
01:24:08to targeting our service members
01:24:09and their vulnerable family members.
01:24:11I would also love to work with your office
01:24:13and members of this body
01:24:15to ensure that conflicts of interest
01:24:17among military financial counselors are prohibited.
01:24:20Their interests need to be with a service member
01:24:22and not their own,
01:24:24and I think we need to really figure out a way
01:24:26to eliminate those conflicts of interest,
01:24:28and I think that they need to receive
01:24:31adequate training, licensure, and oversight,
01:24:34and I think there are ways to think
01:24:35through a centralized body
01:24:37or a way to make sure that that oversight
01:24:41and that accountability is there
01:24:43for financial counselors in the military.
01:24:45Thank you.
01:24:46The more that we can do with our federal agencies
01:24:47to protect our families in the military,
01:24:50I think it's just so crucial.
01:24:51They are always constantly the victims of scams,
01:24:55a scammer, so thank you for that.
01:24:57Let me ask Ms. Goldsmith-Romero.
01:25:01First of all, there's been a lot of conversation
01:25:04about your previous experience as an inspector general
01:25:07overseeing the capital investments of more than 700 banks,
01:25:10and you led a staff of 140 people.
01:25:13You did incredible work.
01:25:14Thank you very much.
01:25:15I was attorney general when you were at SIGTARP.
01:25:17Thank you.
01:25:18During the downturn of the crisis,
01:25:19it was something I took on for the big banks as well.
01:25:22So based on your experience,
01:25:26can you describe for me the skills that you developed
01:25:29during that time that you will bring to the FDIC?
01:25:33Thank you, Senator,
01:25:34and I really appreciate you working with me as SIGTARP
01:25:37in your position as Senator for the great state of Nevada.
01:25:40So I became an expert in capital and liquidity
01:25:45and the interconnections of our financial institutions
01:25:48that not only will bring down banks
01:25:52that are connected to each other, which we saw,
01:25:54but also have Wall Street be interconnected to Main Street
01:25:58so we can see how Main Street is hurt
01:26:02when Wall Street gets in trouble.
01:26:04So there was a lot that I did.
01:26:06I would have to meet constantly with Chair Behr
01:26:10at the FDIC and Secretary Paulson and Secretary Geithner
01:26:14and Chair Ben Bernanke to figure out
01:26:17how do we get in this position?
01:26:19How do we get ourselves so vulnerable
01:26:21and then what needs to change for that?
01:26:22And some of that went then to Dodd-Frank
01:26:26and the changes that need to be happening.
01:26:27And so I know all of sort of the Dodd-Frank
01:26:30and what needs to be implemented
01:26:31to get our financial system in a position
01:26:34where it's much healthier.
01:26:35Then on inside of banks and doing our investigations
01:26:39and also our auditing of just what banks needed
01:26:43during times of great turmoil
01:26:46when there was a lot of failed banks happening
01:26:49that we were going into
01:26:50and then determining the causes of the failure,
01:26:53we could see how banks manage risk or didn't manage risk.
01:26:57We could see the difference
01:26:58if there was a culture of risk management
01:27:00or if there wasn't.
01:27:01These are the types of things
01:27:03that are really, really important
01:27:05from a supervisory standpoint
01:27:06and then also just more generally as a financial regulator.
01:27:10Thank you, I know my time is out
01:27:12so I won't be able to ask the rest of the questions
01:27:15but let me just say to all of the panelists, thank you.
01:27:17Thank you for your willingness to serve.
01:27:19Congratulations on your nominations
01:27:22and welcome to all of the family members
01:27:24who are either here or watching on as well.
01:27:26Thank you.
01:27:27Senator Cortez Masto, Senator Hagerty is recognized.
01:27:31Thank you, Chairman Brown.
01:27:33Commissioner Crenshaw, I'd like to start with you please.
01:27:35You're a vocal supporter of including scope three emissions
01:27:38in the SEC's climate disclosure rule.
01:27:41I'd just like you to briefly explain for us
01:27:42your views on these requirements.
01:27:46Thank you, Senator.
01:27:47Again, I think that investors were asking for information
01:27:51and I think one of the things investors were asking for
01:27:54was a variety of information
01:27:55and there was a lot of support for scope three.
01:27:57At the end of the day, as you know, we did not include it.
01:27:59One of the things that I really think
01:28:01we should have thought about more completely
01:28:02were using models and estimates and assumptions,
01:28:06ways that issuers could provide investors
01:28:10with the information that they were looking for
01:28:12without having to go to the farmers,
01:28:14without having to go upstream or downstream.
01:28:16And I also think we could have really considered
01:28:19a robust safe harbor from liability.
01:28:21That way it would have reduced costs for issuers
01:28:23and provided information to investors.
01:28:25I'm glad to hear you talk about cost right now,
01:28:27but it seemed that when you were responding
01:28:28to Senator Kennedy, you didn't have a good idea
01:28:30about what the costs are,
01:28:30but the cost would be significant.
01:28:32The complexity, obviously, very considerable.
01:28:35When it comes to nominations,
01:28:37our job is to endorse or reject the policy positions
01:28:40that you've taken because we've got to look
01:28:42at your past history as we think about the future.
01:28:45I really find it troubling that you leveraged your office
01:28:48at the SEC to advance these extreme climate positions.
01:28:52I think you've gone way beyond the remit of the SEC,
01:28:54and it's deeply concerning.
01:28:56Not only did you support this climate disclosure rule,
01:28:59but you have argued that it didn't go far enough.
01:29:01And these requirements would crush businesses
01:29:05from manufacturing to energy to agriculture.
01:29:09I've talked to farmers in my state.
01:29:12They talk about, and farmers across the nation, frankly,
01:29:15have talked about how much of a burden
01:29:17this would have imposed on them,
01:29:19disclosing personal information, business information,
01:29:21or go out of business.
01:29:23You talked about wanting to impose cost on scammers.
01:29:26I can tell you, you would impose cost on farmers
01:29:29to the extent you could even put them out of business
01:29:30and the type of legal liability and exposure
01:29:33that this might be a predicate for.
01:29:35I don't know where you're trying to go with this.
01:29:36This absolutely has no place in my view.
01:29:38This is a very misguided proposal you've supported.
01:29:41Commissioner Goldsmith-Romero, I'd like to come to you.
01:29:44It was reported that in 2016,
01:29:46when you were the Inspector General for TARP
01:29:48in investigating corruption allegations
01:29:49related to Mayor Mike Duggan's Detroit demolition program,
01:29:54that you told state investigators to, quote,
01:29:56go dark and halt that investigation,
01:30:00noting to your staff,
01:30:01Mayor Duggan's Obama-White House ties
01:30:04and his potential Clinton administration role.
01:30:07Is that true?
01:30:08Did you tell mission investigators in 2016
01:30:10to slow down their investigation?
01:30:12Absolutely not.
01:30:12That's completely made up.
01:30:14Can I just get this on the record then?
01:30:16Did you tell your staff in 2016
01:30:18that Mayor Duggan was close with the Obama-White House
01:30:22and a potential Hillary Clinton cabinet member
01:30:24or other senior post in the Clinton administration?
01:30:26No, Senator.
01:30:27I'm glad to have that on the record.
01:30:28Thank you.
01:30:29Come back to you, Commissioner Crenshaw.
01:30:32You descended from the SEC's approval
01:30:34of Grayscale's pot spot Bitcoin ETF application,
01:30:37despite the fact that a federal court
01:30:40had struck down the SEC's prior disapproval.
01:30:43Do you continue to disagree
01:30:44with the SEC's approval of Bitcoin ETFs?
01:30:49Senator, to approve an ETP,
01:30:52you have to make a public interest finding
01:30:54on each individual one.
01:30:56So to the degree that the commission votes,
01:30:58and we've only voted on that one, Senator.
01:31:01And to make that public interest finding,
01:31:03you look at the facts in front of you.
01:31:06And given the significant fraud
01:31:09in the underlying spot markets globally,
01:31:12given the opacity-
01:31:13Well, the court looked at the facts
01:31:15and they struck it down.
01:31:16I've just been deeply disturbed
01:31:18by the posture that the commission
01:31:20and specifically yourself have taken
01:31:22with hostility toward the crypto industry.
01:31:24This is a critical industry
01:31:25in terms of innovation and technology in our country,
01:31:28and I hate to see it being pushed overseas.
01:31:31Commissioner Goldsmith-Romero,
01:31:32I'm going to come back to you now.
01:31:34The current FDIC chairman
01:31:35grossly mishandled the auctions
01:31:37of Silicon Valley Bank and Signature Bank,
01:31:39two of the largest bank failures in US history.
01:31:42Where do you think the biggest risks are right now
01:31:44within the banking system?
01:31:46Thank you for that question, Senator.
01:31:48I think we need to look at,
01:31:49we still have this commercial real estate risk
01:31:53that is happening, particularly related to offices
01:31:57and after the pandemic and also multifamily homes.
01:32:00So I think that's a major risk we have to look at.
01:32:03I think we also just need to continue
01:32:04to think about interest rate risk
01:32:06and how banks should manage that.
01:32:09So those are some of the areas-
01:32:10Real quickly, FDIC leadership heavily cited
01:32:13the requirements of the least cost test
01:32:16as an excuse for the fact that these auctions failed.
01:32:18What role did the least cost test play
01:32:20in the failed auctions in your view?
01:32:23Yeah, so I'm just looking at it from the outside,
01:32:24Senator, just like you are.
01:32:26And so I don't know-
01:32:27Actually, I'm not looking at it from the outside.
01:32:29I saw what happened.
01:32:30And the least cost rule is an excuse
01:32:32because it was misapplied.
01:32:33It's got to be fixed.
01:32:35The person that's going to come in and lead this agency
01:32:36can't learn on the job.
01:32:37You need to know how it needs to be addressed
01:32:40because what we did here,
01:32:41what the commission did,
01:32:42was expose the system to massive risk.
01:32:44It should have never happened this way.
01:32:46How would you fix it?
01:32:47Yeah, so I understand the least cost test.
01:32:49What I don't-
01:32:50What I was saying from the outside is
01:32:52I can't see sort of specifically how it was applied
01:32:54and how they came up with those numbers.
01:32:56That's something that's been raised
01:32:57by a number of senators
01:32:58and would be one of the top things
01:32:59I would go in to try to dig behind
01:33:01and try to figure out what is going on.
01:33:03I hope that before you're confirmed,
01:33:04you will work with us
01:33:05to come up with an approach to this.
01:33:07Because again, you could get the call on day one
01:33:10when you walk in the office
01:33:11that there's another bank failure.
01:33:12We can't let this situation repeat itself.
01:33:15Thank you, Mr. Chairman.
01:33:17Senator Warnock of Georgia is recognized.
01:33:20Thank you so very much, Chair Brown,
01:33:22and thank you to all of the nominees
01:33:24for your commitment to serve.
01:33:27I'd also like to extend a special welcome
01:33:30to Commissioner Kristen Johnson,
01:33:32who hails from the great state of Georgia,
01:33:35where she has served as a law professor
01:33:37at Emory University.
01:33:39Congratulations, Commissioner Johnson,
01:33:42and congratulations to your family.
01:33:44As we've discussed in this committee,
01:33:46systemic and cultural issues
01:33:48have plagued the FDIC in recent years.
01:33:51It's clear that senior leadership of the FDIC
01:33:54turned a blind eye.
01:33:56A blind eye to ongoing discrimination,
01:33:58harassment, and abuse.
01:34:01And they failed to properly reprimand
01:34:04or terminate offenders.
01:34:08Simply, the FDIC failed to institute
01:34:11a culture of accountability.
01:34:14And as a result, employee morale is low,
01:34:18which has deep implications for the mission.
01:34:20Ms. Goldsmith-Romero,
01:34:22thank you for visiting with me yesterday.
01:34:24I enjoyed our conversation in my office
01:34:27to discuss your plans for the FDIC.
01:34:31If you are confirmed as its next chair,
01:34:33I appreciated your candor.
01:34:36The task you face, as you well recognize,
01:34:39is monumental.
01:34:41This is tough work.
01:34:43The FDIC plays a critical role
01:34:45in ensuring the safety and the soundness
01:34:48of our financial system,
01:34:49and it needs an energized workforce
01:34:51in order to do that.
01:34:53What experience do you have
01:34:54changing organizational cultures?
01:34:58And how do you plan to draw on that experience
01:35:00at the FDIC?
01:35:02Thank you, Senator.
01:35:03I very much enjoyed our conversation
01:35:05in your office and talking through,
01:35:07these are tough issues.
01:35:09So I came into SIGTARP,
01:35:11and it was primarily a law enforcement office.
01:35:14It was male-dominated.
01:35:16It was special agents who I have a great regard for,
01:35:20and because they put their lives on the line.
01:35:22But I would say sometimes the level
01:35:25of professionalism, the language,
01:35:27and all of that was not at the level
01:35:29that I thought was appropriate,
01:35:31particularly for an IG's office.
01:35:33One of the things I came in and did
01:35:35was raise very high this level of respect
01:35:40and this level of professionalism,
01:35:42this level of dignity by which
01:35:45we would treat each other,
01:35:46but also how we would refer to those
01:35:47we were investigating and anyone
01:35:51that we were coming in contact with.
01:35:53And so that organizational change
01:35:56and being able to do that
01:35:58and bring people along with that
01:35:59so they didn't fight me on it,
01:36:01but that they actually embraced it
01:36:03and moved in that direction,
01:36:04I think that would bring to the FDIC.
01:36:06And as you expressed yesterday
01:36:08and expressed today, it seemed
01:36:10it was just part of the culture.
01:36:12And people, this is just how it is?
01:36:16Yeah, I think cultures can change.
01:36:18And I think you start with the tone
01:36:20at the top and what's acceptable,
01:36:22and you send clear messages
01:36:23as to what's acceptable and what's not.
01:36:25The Clery report made seven recommendations
01:36:28for the FDIC ranging from protecting victims,
01:36:31improving policies, and holding leadership
01:36:33accountable for inaction.
01:36:36When Chair Gruenberg came in front
01:36:37of the Banking Committee in May,
01:36:39he agreed to provide a written update
01:36:41and briefing to my subcommittee
01:36:43on the status of these recommendations.
01:36:46Ms. Goldsmith-Romero, what is your sense
01:36:48of where the FDIC is in implementing
01:36:51these recommendations?
01:36:53Yes, Senator, it's hard for me to see
01:36:55on the outside, although I read
01:36:58some of the things that are happening
01:37:00on the website, but I'm very committed
01:37:02to being transparent with you
01:37:04and communicating with you as part
01:37:06of your chair of the subcommittee.
01:37:09Well, yeah, I made it clear to him
01:37:11in no uncertain terms that as chair
01:37:13of Consumer Protection and Financial Institutions,
01:37:17I would hold him accountable
01:37:18and would hold anyone in that position
01:37:21accountable for cultural and structural changes needed.
01:37:24And I look forward to supporting your nomination
01:37:29and holding you accountable to turning the FDIC around.
01:37:33Certainly, you bring the kind of experience
01:37:35that we need at just this particular moment.
01:37:40Since I've got a little bit more time,
01:37:45a common theme in the post-mortems
01:37:47of the bank failures last spring
01:37:51was that there was a brain drain at the FDIC
01:37:54that led to a lack of seasoned
01:37:55and competent bank examiners,
01:37:57which helped prevent issues from being caught early.
01:38:00At the time, this was attributed
01:38:01to low pay and difficult working conditions.
01:38:04We now know that the FDIC failed
01:38:05to protect junior employees, particularly women
01:38:09and people of color from harassment
01:38:11and retaliation and failed to punish the wrongdoers.
01:38:14How will you ensure examiners feel empowered
01:38:17while also working to recruit,
01:38:20to retain and support examiners,
01:38:22specifically examiners who are women and people of color?
01:38:25Thank you for that, Senator.
01:38:27We gotta make sure that they feel safe.
01:38:29We gotta make sure there's a good process
01:38:32that they trust, that they can raise these complaints.
01:38:34And then we have to empower examiners
01:38:37in other ways that allow them to be nimble,
01:38:39that allow them to use their judgment
01:38:41and their expertise and experience.
01:38:42And I do want to be able to recruit
01:38:45to deal with this issue of the workforce
01:38:49and how long some of them have been
01:38:52and we need to bring more in.
01:38:54Thank you so much.
01:38:55I think all of this underscores
01:38:57the ways in which these issues that we're raising
01:38:59around the culture, around accountability,
01:39:01abuse, harassment, that these aren't extraneous
01:39:05to the mission.
01:39:07They are central to the ability of FDIC
01:39:09to carry out its mission for employee morale,
01:39:12for folks to remain focused on the work
01:39:14that we require them to do, need them to do
01:39:16in order to protect our financial system.
01:39:18So thank you again for offering yourselves up for service
01:39:22and I look forward to supporting your nomination.
01:39:25Thank you, Senator Warnock as Senator Brett
01:39:26of Alabama is recognized.
01:39:27Thank you, Chairman Brown.
01:39:29Welcome to all of the people here and your families.
01:39:32I saw that so many of you brought your families.
01:39:34So we are so glad that y'all are here today as well.
01:39:38So I want to start, thank you so much for coming by.
01:39:40Enjoyed having, being able to have a conversation.
01:39:43I want to start where my colleague from Georgia left off.
01:39:46He is exactly right.
01:39:47We have got to go back to instilling confidence in the FDIC.
01:39:51It was created in 1933 so that Americans
01:39:55did have confidence in that.
01:39:56And I think the FDIC has lost its way
01:39:59and has forgotten what its core mission is.
01:40:01So just want to associate myself with those comments
01:40:05in saying we want our best and brightest working at the SEC.
01:40:09We want that to be the place they want to work.
01:40:12That's ultimately going to be what helps us maintain
01:40:14the stability of our financial institutions
01:40:16and also ensure Americans are confident
01:40:19that their hard-earned taxpayer dollars are protected.
01:40:22So Mrs. Goldsmith-Romero, we discussed yesterday.
01:40:27I am incredibly concerned, obviously,
01:40:29that as the FDIC has strayed from its primary core
01:40:33purpose and mission, it's become an agency that
01:40:35is overly involved in controversial rulemaking
01:40:39and has become politicized in many ways
01:40:43in its decision-making process rather than actually following
01:40:46that core mission.
01:40:48And on that, I wanted to get your thoughts
01:40:50on if we see another failure like we saw last year.
01:40:55Let's say a bank similar in scale to SVB were to fail.
01:41:00How would you approach that resolution process?
01:41:05Thank you, Senator.
01:41:06I very much enjoyed our conversation in your office
01:41:08and appreciate your commitment to making sure
01:41:13that the FDIC thrives in its mission.
01:41:16So I dealt with a lot of failed banks while at SIGTARP,
01:41:19and these things happen fast.
01:41:20So I think the first thing you need to do
01:41:22is to ensure that the FDIC is looking at pockets of risk
01:41:27in a very proactive way, data analytics way,
01:41:30and that we also understand connections.
01:41:33And then we figure out what needs to happen.
01:41:35First thing you need to do is sort of figure out
01:41:37what you're going to do with the bank in terms of a resolution
01:41:40when you walk in.
01:41:41Is there going to be an auction?
01:41:42Is that just going to be wound down?
01:41:44How do you keep deposits?
01:41:44Yeah, and on the auction, let's say
01:41:46there's going to be an auction.
01:41:47Would you allow an open bidding process
01:41:49where all banks can or financial institutions
01:41:53can be a part of that?
01:41:54I think we'd want to bring all the bidders in to try
01:41:57to get the best result.
01:41:59All interested parties should have that opportunity.
01:42:02And in what circumstance would you
01:42:03decide to liquidate rather than auction off
01:42:08the bank private sector?
01:42:10It's tough.
01:42:11It's tough in terms of liquidation.
01:42:13You want to make sure that the deposits are safe.
01:42:16That's the number one thing with the deposit insurance fund.
01:42:18You also want to look at those assets
01:42:20and say if there's going to be a loss of deposit insurance fund,
01:42:23you want to see if there's assets to sell.
01:42:26So sometimes, though, there's going to be a liquidation.
01:42:29Well, let's say that it is a bidding process.
01:42:31How do you decide which offer to accept?
01:42:34Well, I think we have to follow the least cost test, which
01:42:36is laid out by Congress.
01:42:38And then we'd follow all the standards that are in that.
01:42:41And we'd follow all the rules.
01:42:43So under that scenario, would you
01:42:44commit to accepting the highest bidder, the highest
01:42:49bidder that comes to you?
01:42:51Yeah, I think you'd have to go into the very specifics.
01:42:53I think that's what you're looking for, right?
01:42:55You're looking for the highest bidder
01:42:57because you want the least cost to the deposit insurance fund.
01:42:59Absolutely.
01:43:00That's the objective here.
01:43:01The objective is not about playing politics.
01:43:03It's not about whether or not we want a big bank to get bigger
01:43:05or whether we want someone in this market.
01:43:07It is what is best for the American people.
01:43:10It is to ensure that we don't want
01:43:13to have to dip into the diff at $20 billion.
01:43:16To me, Chair Gruenberg did a poor job
01:43:20and chose to play politics.
01:43:22And the American people paid the price.
01:43:24And it is your job not only, or his job,
01:43:27not only as the secondary supervisor,
01:43:30but also in his role at the FDIC,
01:43:32to ensure that these things don't happen.
01:43:34And when they do, though, it's not
01:43:35time to take a look and figure out
01:43:37what people on this committee may want you to do.
01:43:39You have to do what is best for the American people.
01:43:42So I'm glad to hear you say that you will do that as well.
01:43:45In taking a step back, obviously,
01:43:48there was poor internal risk management.
01:43:50And regulators clearly failed to do their job
01:43:53before the banks failed.
01:43:55There were numerous red flags that were missed.
01:43:58We've talked about that over and over again.
01:44:01Would you characterize, though, what
01:44:03happened as a capital or a liquidity issue with SVB?
01:44:08I think it's a failure in risk management,
01:44:09then a failure in supervision.
01:44:12Capital or liquidity?
01:44:14So I think the issue of liquidity
01:44:15becomes really important when a bank is going down,
01:44:18because short-term liquidity dries up so fast.
01:44:20And so then they can't continue.
01:44:21And then when you couple that with the bank runs,
01:44:24that's where you get into trouble.
01:44:25And last, I have a few.
01:44:27I think it was most definitely liquidity.
01:44:29But a couple of, lastly, do you think
01:44:32that 2155, the long-term debt proposal that
01:44:36is before you currently, or before FDIC currently,
01:44:40that it is properly adhering to the tailoring requirements
01:44:43in 2155?
01:44:44Thank you, Senator.
01:44:45I've seen your letter, which is pretty complex.
01:44:49And I'm still looking at the long-term debt proposal.
01:44:52And I want to look at the comments.
01:44:54OK, and that's fair.
01:44:55Let me ask you this, then.
01:44:56Do you agree, Chair Powell mentioned earlier this week
01:44:58that 2155 applies to all rulemaking out of your agency?
01:45:02Do you agree?
01:45:03100%.
01:45:04It's the law of the land.
01:45:05Thank you.
01:45:07Senator Butler from California is recognized.
01:45:10Thank you, Chairman Brown.
01:45:11I want to join my colleagues in just congratulating all of you
01:45:15for being nominated, celebrating your families
01:45:19for their sacrifices, for you all
01:45:21to achieve the level of success that
01:45:24has landed you at this table as a nomination of the President
01:45:28of the United States.
01:45:30It is no small feat.
01:45:33And it definitely takes the whole team.
01:45:36So thank you all for doing it.
01:45:40Ms. Goldsmith-Romero, thank you, Commissioner,
01:45:44for spending a little bit of time with me and my team
01:45:48extensively going through your credentials, experience,
01:45:53preparation, background.
01:45:55As has already been stated, taking
01:45:58on the role of FDIC Chair in this moment is no small task.
01:46:04And the godly report is quite substantive, in my opinion,
01:46:11and raises real concerns, not just
01:46:14about the culture of supervision and personnel policies at FDIC,
01:46:21but a real crisis in leadership.
01:46:24And so I want to ask just a very specific question.
01:46:26I feel like I was clear with Mr. Ruhenberg about the requirement
01:46:33to not just have a plan that sits
01:46:35on a shelf or a report that is nice that everyone reads when
01:46:41it's in the Wall Street Journal, but the leadership that
01:46:45is required to actually execute and turn things around.
01:46:50So a very simple question.
01:46:52What are the first three things that you
01:46:55will do if you are confirmed?
01:47:00Thank you, Senator.
01:47:02Very much appreciated our discussion.
01:47:04So the first thing I would do is send a clear message
01:47:07that harassment, discrimination, retaliation
01:47:10will not be tolerated.
01:47:13That includes putting a system in place
01:47:16that has an EEO process that employees could trust.
01:47:21Having everyone encourage employees
01:47:22to use that so that management can see that.
01:47:26I think we would be doing investigations,
01:47:28conducting investigations, bringing accountability.
01:47:30I think a number of things described in the report,
01:47:33warrants removals.
01:47:35And then I'd change this litigation adverse culture
01:47:39so that it's not kick the can down the road
01:47:41or move things around, but you address it right away.
01:47:46Thank you for the specific response.
01:47:49It's consistent very much with ideas
01:47:51that you shared with our team yesterday.
01:47:54And similar to Senator Warnock, I
01:47:57think this committee, through his subcommittee,
01:48:00but I do believe broadly through the leadership of our chair,
01:48:04is committed to being fully connected to the plan that
01:48:10is moving forward and applying appropriate levels
01:48:14of accountability from the seats in which we sit
01:48:17to be able to assist as much as possible, as much as is
01:48:22required, but I think most importantly,
01:48:24to be able to help to do our part to restore confidence
01:48:29with the employees at the FDIC and the work
01:48:31that you are going to be asked to do if you were confirmed.
01:48:35Mr. Ito, it was a pleasure to spend time with you yesterday.
01:48:41And your leadership on the island of Hawaii
01:48:45has just, I think, goes underappreciated
01:48:50as an insurance commissioner and just a public servant
01:48:54committed to the state.
01:48:57And it just was a great time talking with you
01:49:00and learning about your work and your perspective
01:49:02and what you would like to bring to FSOC if you were confirmed.
01:49:08Just a quick question, I wanted to make
01:49:11sure we had an opportunity to get
01:49:12your voice on the record here.
01:49:16We talked a good deal about local economies and the property
01:49:20insurance, the rising costs for consumers,
01:49:24and the concerns that insurers and bad years
01:49:30that insurers are having relative to climate impacts.
01:49:37I'd love for you to talk about how
01:49:39you believe FSOC and relevant government agencies,
01:49:43including insurance commissioners,
01:49:45should capture climate risk data and how
01:49:49we could measure the potential economic losses
01:49:52from the insurance market.
01:49:55First of all, Senator, I enjoyed our conversation the other day.
01:50:00With respect to getting data, the NEIC and FIO
01:50:05at the present time are collecting data
01:50:09on homeowners specifically.
01:50:13It's called a property and casualty market intelligence
01:50:16data call that NEIC and FIO are working through.
01:50:20And I'm glad that they are cooperating.
01:50:23I think this is a good first step in collecting data
01:50:26and identifying what stresses are occurring in the property
01:50:31and casualty market throughout the country.
01:50:35It is also, I believe, really a good first step
01:50:38in analyzing the data.
01:50:40If I'm confirmed, that's something
01:50:43I really want to get into in really analyzing and assessing
01:50:47what's happening in the entire United States marketplace
01:50:50on the property and casualty and the impact that's
01:50:53occurring not only to insurers on financial solvency,
01:50:57but I think more importantly in terms
01:50:59of what's happening to the people who are the policy
01:51:02holders are purchasing those policies.
01:51:06And being currently, I can attest for Hawaii,
01:51:09there's quite a bit of homeowners, condo owners
01:51:12that are really being financially stressed because
01:51:15of the catastrophic losses, the unfortunate event that
01:51:18happened in Maui, as well as the very hard market
01:51:20that we're in at the present time.
01:51:24Thanks, Senator Butler.
01:51:26Senator Lamas from Wyoming is recognized.
01:51:28Thank you, Mr. Chairman.
01:51:31Ms. Goldsmith-Romero, I'll start with you.
01:51:33Welcome.
01:51:34Thank you for coming to my office.
01:51:36And our conversation was very helpful.
01:51:40Should banks be able to hold the assets of digital asset
01:51:44companies?
01:51:46Thank you, Senator.
01:51:47I appreciated our conversation, too.
01:51:48Banks do hold custody of digital assets right now.
01:51:54And do you support that?
01:51:58Yes, I'm very familiar with banks
01:52:00holding custody of those assets.
01:52:02And it's another business like any other business.
01:52:07Should banks be able to provide services
01:52:10to digital asset companies like payment services?
01:52:14Yeah, I don't think it's the FDIC's role
01:52:16to tell banks what industries or companies they should
01:52:21be providing services to.
01:52:23I appreciate your answer, because otherwise we
01:52:27end up with concentration risk, regardless of whether we're
01:52:30talking about digital assets or oil and gas
01:52:33or any other banked industry.
01:52:39So I appreciate that.
01:52:42What's your action plan, the specific steps
01:52:45you would take to solve the management crisis that's
01:52:48going on at the FDIC?
01:52:51Thanks, Senator.
01:52:51And I know you care a lot about this, and we talked about this.
01:52:54And I talked about how the report reads
01:52:56like a bygone era, particularly for women and minorities
01:52:59and people in the LGBTQ community.
01:53:02It's going to take a lot.
01:53:03If confirmed, I'll give you my sort of top line thoughts.
01:53:06Modernize the federal workplace.
01:53:07Put in the best practices of federal workplace
01:53:11that I'm used to and like what I've led.
01:53:13I want to herald those employees who
01:53:14are doing the right thing and the managers who
01:53:16are doing the right thing.
01:53:17I would send a clear message that harassment,
01:53:19discrimination, retaliation is not allowed.
01:53:22That includes bringing accountability, investigations,
01:53:25and disciplinary proceedings.
01:53:28Put in place the process, the right process
01:53:30that I'm used to seeing for EEO, and encourage people
01:53:34to use it rather than have them live in fear.
01:53:36Change this litigation adverse culture,
01:53:40which just moves the problem around
01:53:42or kicks the can down the road, and address it right away.
01:53:47The error of each office being a fiefdom would end.
01:53:50It would not be 70 plus FDICs.
01:53:53It'd be one FDIC, just like I did at SIGTARP with one SIGTARP.
01:53:57And then we talked about, I have some plans
01:54:01I'm thinking about on that hotel.
01:54:03Thank you.
01:54:03And I thank you for your willingness
01:54:06to address it right away.
01:54:08I think it does need immediate attention.
01:54:10So thank you.
01:54:12Mr. Ito, welcome.
01:54:17Do you support implementation of the International Task
01:54:20Force on Climate-Related Financial Disclosures?
01:54:27Senator, thank you for the question.
01:54:31At the present time, I'm not a member of SOC.
01:54:34It's an issue that I would like to learn more about,
01:54:38or question what that is.
01:54:40And I'll be glad to meet with you and your staff.
01:54:44Good.
01:54:44I would like to meet with you about that.
01:54:47I'm a little bit concerned about taking away
01:54:50from the ability of states to do what's
01:54:53best in their local markets.
01:54:55And your Hawaiian market's very different from mine
01:54:59in the state of Wyoming.
01:55:01And I want to make sure that states' markets are tailored
01:55:08to the needs of those states.
01:55:10And tell me about your advocacy for states.
01:55:13So Senator, as being really a state regulator for almost,
01:55:19in five days, there'll be 31 years.
01:55:21You're the commissioner's commissioner, aren't you?
01:55:25I've been there and been through many different changes.
01:55:28State-based regulation, I think, has done an excellent job.
01:55:33My fellow state regulators, what we
01:55:35do in terms of monitoring and protecting the insurance
01:55:38market, as well as consumers.
01:55:40As you noted, each state has its own unique risks.
01:55:44I mean, Hawaii, we have catastrophe.
01:55:47We have volcano, tsunamis, hurricane, and wildfires.
01:55:53And every state is different.
01:55:55So there is a uniqueness in the states.
01:55:58As I mentioned, really, all my fellow commissioners,
01:56:02superintendents, have done an excellent job
01:56:05and will continue to do so.
01:56:07So one more question for you.
01:56:10The primary function of the council
01:56:12is to identify risks to financial stability, correct?
01:56:17Yes.
01:56:18So what do you consider to be the top risk
01:56:21to financial stability?
01:56:25As FSOC has identified in their 2023 annual report,
01:56:29there's a number of risks that could pose a threat
01:56:33to the financial stability.
01:56:35For me, one of the risks that Hawaii
01:56:39is living through right now is really
01:56:40on catastrophic risks and climate risks.
01:56:45The Maui wildfire resulted in $3.2 billion in insured losses.
01:56:52It has made the Hawaii market even harder.
01:56:56Tragically, there was a loss of 102 lives in Lahaina.
01:57:01And so with respect to climate risks,
01:57:03in the last four years in the US,
01:57:06there's been 20, on average, about 20 catastrophic losses
01:57:11over a billion dollars.
01:57:13Total loss of about four consecutive years
01:57:16of $100 billion in reinsurance loss.
01:57:18So that is an emergent risk that FSOC has identified.
01:57:24If unconfirmed, that is one area that I
01:57:27would be interested in really further analyzing what's
01:57:31happening with the property and casualty market
01:57:33and the stresses it's putting on the financial system.
01:57:37Thank you, Mr. Ito.
01:57:38My time is up.
01:57:39I do have a question for you, Ms. Johnson.
01:57:42But I will submit it for the record
01:57:45and would kindly ask for your written response.
01:57:49Thank you.
01:57:50Thank you all for your willingness
01:57:52to be considered for one of these appointments.
01:57:55Mr. Chairman, I yield back.
01:57:56Thank you, Senator Lewis, for your thoughtful questions.
01:57:59And I think Mr. Ito's response tells you
01:58:01the devastating impact of our unwillingness and inability
01:58:06in this body to do as much as we should
01:58:09addressing climate issues.
01:58:10But thank you for laying that out in insurance terms.
01:58:13Ms. Johnson, last question.
01:58:14I'm going to have fun, and then we'll adjourn.
01:58:18We continue to see significant risks to our financial system.
01:58:21We experienced three of the largest bank failures in US
01:58:23history after depositors lost confidence,
01:58:26withdrew their money at an unprecedented rate,
01:58:29as you remember.
01:58:30If confirmed, you'd have the critical job
01:58:31of identifying and protecting our financial system
01:58:34from these risks to ensure that hardworking Americans can
01:58:38keep their money and their jobs.
01:58:40Ms. Johnson, what do you see as the most prominent risk
01:58:44to our financial system, and how would you
01:58:45go about understanding and addressing them?
01:58:49Thank you so much, Mr. Chairman.
01:58:51As was referenced earlier, for the Department of Treasury,
01:58:55FSOC has outlined a number of vulnerabilities
01:58:58to financial services markets.
01:59:00These risks, as outlined, and as I mentioned
01:59:04in my opening statement, some of them are endogenous,
01:59:06some are exogenous, some are emerging risks
01:59:09that we've not yet had sufficient opportunity
01:59:12to effectively explore.
01:59:14I think among the risks that are most prevalent in the moment,
01:59:18we've discussed the climate risk and its potential impact
01:59:21on financial markets.
01:59:22I think cyber preparedness also presents
01:59:25as a significant question.
01:59:26And in fact, in the Treasury Department
01:59:29within the Office of the Assistant Secretary
01:59:31for Financial Institutions, a very recent report
01:59:34that looks at the intersectionality of cyber
01:59:36and AI effectively begins us down
01:59:39the road of a conversation to think carefully
01:59:41about how to address these concerns.
01:59:43I think you noted, rightly, with respect to SVB and SB,
01:59:48Signature Bank and their failures,
01:59:51not only risk management losses and general concerns
01:59:54regarding liquidity, but very expressly,
01:59:57the accelerated manner during which runs occurred
02:00:01at these banks, particularly with respect
02:00:05to communications over social media and the technology
02:00:11to facilitate expedient withdrawals, even over weekends,
02:00:15creates a need for us to think carefully
02:00:17about how we've integrated technology
02:00:19into the banking sector and how we rightfully
02:00:21will be able to protect the banking sector going forward
02:00:24in the context of crises and concerns
02:00:26like those we saw in March 2023.
02:00:29If confirmed, I would be grateful for the opportunity
02:00:31to work directly with your office
02:00:33and to engage with others on this committee
02:00:36with respect to those risks and others
02:00:37that you might identify.
02:00:39As we will, absolutely.
02:00:41Thank you to the four of you for being here.
02:00:44Thank you for your testimony and your concise,
02:00:47good answers to questions.
02:00:48I hope we can work together as a committee
02:00:50to move forward quickly in today's nominees.
02:00:52I emphasized how three of you have been in front of this
02:00:57and have had major, big confirmation votes,
02:01:00close to unanimity in some cases.
02:01:02Senators who wish to submit questions for the record,
02:01:04these are due at 5 p.m. Monday, the 15th of July.
02:01:08To the nominees, we'd like to have your responses
02:01:11on Friday, July 19th by 5 p.m.,
02:01:13so we need these more quickly than sometimes,
02:01:16so we hope to move as quickly as possible on all this.
02:01:19Thank you for your testimonies, the four of you today.
02:01:23The committee's adjourned.