Sherrod Brown Outlines Why ‘Change Is Necessary’ In The FDIC: It's An ‘Outdated Good Old Boys Club’

3 months ago

Earlier this month, Sen. Sherrod Brown (D-OH) questioned nominees on FDIC oversight during a Senate Banking Committee hearing.

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Transcript

00:00Thank you, Mr. Ito, I would express the opinion

00:04that Joy probably made the right choice

00:06and we will not keep you long so you can catch up.

00:09I'm glad to report that they made it safely

00:11to their destination.

00:13I'm not suggesting what my colleagues ask about,

00:16but you may not get the most questions on this panel.

00:19But nonetheless, you should stay here for the entire panel.

00:22But then again, I don't know where you're going

00:26on your vacation, so thank you all.

00:30I'll start with you, Ms. Goldsmith-Romero.

00:31FDIC suffered from significant

00:33longstanding workplace culture issues.

00:36It's been described as misogynistic, patriarchal,

00:39insular, outdated, good old boys club.

00:42Significant change is necessary because FDIC employees

00:46deserve a workplace free from discrimination

00:48and abuse and harassment.

00:50How do you go about addressing these longstanding issues

00:53that appear to be deeply ingrained through FDIC chairs

00:58of both parties for far too many years

01:00did seem to be ingrained in the agency's culture?

01:04Thank you for the question, Senator.

01:05I mean, when I read the report,

01:07it reads like a bygone error,

01:09particularly for women and minorities

01:12and members of the LGBTQ plus community.

01:15So I'll learn more if confirmed and I can get in there,

01:19but let me give you my top line thoughts.

01:22The first is to modernize the federal workplace

01:26to one that has the best practices

01:27that you would expect to see in federal workplaces,

01:30that invests in staff morale and values

01:32and supports employees.

01:35The second is to herald the employees and managers

01:37that have been doing the right thing.

01:39Third, I'd send a clear message that harassment

01:42and discrimination and retaliation will not be tolerated.

01:45So that includes investigations

01:47and holding people accountable.

01:49And I can say that the conduct in the report

01:52would warrant multiple removals.

01:56Additionally, we need to put in place

01:58what is the normal standard federal EEO process

02:03for complaints and then encourage people to use it

02:05rather than have them live in fear.

02:07I would change the litigation adverse culture

02:11so that problems could be addressed right away

02:14rather than moved around or kicked the can down the road.

02:18And then the error of each office being a fiefdom

02:22would be over, there would not be 70 plus FDICs,

02:25there'd be one FDIC with all employees in all offices

02:28following the same rules, the same way.

02:34Discuss how your tenure as did SIGTARP

02:39informed your understanding of our banking system

02:43and prepared you to lead the FDIC

02:45into its next much better chapter.

02:49Yeah, thank you, Senator.

02:50SIGTARP is really deep into banks

02:52at the worst time in our nation's history.

02:55We were with inside the same confidential

02:59supervisory privilege that FDIC and other regulators hold.

03:02And so, and we were dealing with failed banks all the time

03:05and banks that were in trouble.

03:06So we are actively monitoring all of the 700 plus banks

03:10in TARP, making recommendations to treasury.

03:14A lot of those were community banks

03:15that were having trouble getting out of TARP.

03:17And we were following all of that

03:19and following their health and condition.

03:22In terms of our investigations,

03:23and we prosecuted more than 100 bankers,

03:26more than 90 bank borrowers who hurt banks.

03:29And so we would go in into banks

03:32just like a bank examiner does.

03:33We would analyze all the bank's books and records,

03:36the examiner's records, we'd be talking to banks,

03:39employees and management, as well as the examiners.

03:42We'd be using our proactive data analytics based system

03:45to trend out call reports

03:47and be looking at camel's ratings

03:48and really trying to identify areas of risk,

03:53how banks were managing with risk,

03:54and then following,

03:55whether they were following the regulatory rules or not.

03:59And then on the largest banks,

04:00I did a lot of work on systemic risk,

04:02capital, liquidity issues, things like that,

04:05and then served on a council of IGs

04:07with oversight over FSOC.

04:11Listening to you, having talked to you before,

04:13and I know you talked to a number of senators

04:15in both parties,

04:17and looking at your experience and background says to me,

04:19there is no question,

04:21there is no real reason to oppose you

04:23except for partisan reasons.

04:25And I hope the committee rises above that.

04:28Ms. Crenshaw, I'm running up against the clock.

04:32We'll have time for one question to her.

04:34Mr. Johnson, Ms. Johnson, Mr. Hito, I apologize for that.

04:37We will get you written questions.

04:39Ms. Crenshaw, Americans become more involved

04:41in financial market in recent years

04:43as workers become responsible for saving

04:46for their own retirements.

04:46That's a whole nother debate.

04:48But the system's often rigged for Wall Street

04:50against everyone else.

04:52We know that most of inflation in this country

04:54is because of corporate greed.

04:56We see all kinds of signs of this is a system

05:00for Wall Street more than for workers.

05:02What steps does SEC need to take

05:06to make sure Americans have the tools

05:08and the information they need to feel confident

05:10they'll be treated fairly as they save for the future?

05:15The fact that Americans' retirement

05:16is in their own hands more than ever

05:18means that the SEC must promote trust in our markets.

05:23We do that by reducing bad actors,

05:25ensuring truthful and appropriate disclosures,

05:28and making sure that market participants

05:30play by the rules, all of them.

05:32This helps maintain confidence in the markets

05:34so investors know it's a safe place to put their money.

05:38Senator.

Sherrod Brown Outlines Why ‘Change Is Necessary’ In The FDIC: It's An ‘Outdated Good Old Boys Club’

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