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Senate Committee Considers Testimony on Banking Agency Priorities

At a hearing before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, regulators from the National Credit Union Administration ("NCUA"), the FDIC and the OCC testified on current agency priorities and challenges.

The Committee considered the testimony from:

  • OCC Acting Comptroller Michael Hsu, who stated that the challenges requiring the OCC's urgent attention are (i) bank complacency, (ii) banking inequality, (iii) the adaptation to digitalization and (iv) climate change risk in the finance system.
  • FDIC Chair Jelena McWilliams, who highlighted agency efforts on (i) consumer protection, (ii) financial inclusion, (iii) the supervisory process and other recent regulatory actions, (iv) resolution readiness and (v) diversity, equity and inclusion. She noted supervised institutions' efforts in response to the COVID-19 pandemic, including (i) allowing loans to be modified without fees, (ii) waiving account fees, (iii) offering customers curbside and in-home services, (iv) providing customers with the option to open accounts and conduct financial transactions online or through a mobile application and (v) putting in place sanitation and employee health check procedures at branches.

  • NCUA Chair Todd Harper, who requested that Congress consider legislation to provide the NCUA with examination and enforcement authority over third-party vendors, such as credit union service organizations.

At the hearing, Committee Chair Sherrod Brown (D-OH) and Committee Ranking Member Pat Toomey (R-PA) disagreed on agency priorities and their most pressing challenges.

Senator Brown asserted that working-class individuals are subject to banks' "exorbitant" fees, high minimum balance requirements and "segregated second chance accounts." Senator Brown advocated for (i) no-fee bank accounts that will enable all Americans to open a bank account, (ii) closing the regulatory gaps that do not subject FinTech companies to the same rules to which banks and credit unions are subject and (iii) robust financial watchdogs that hold institutions accountable for serving their customers and communities. He called on the FDIC to shift its approach to bank mergers, claiming that its current approach leaves small towns across the country without bank branches. Senator Brown praised NCUA Chair Harper for his "bipartisan" approach to ensure that credit unions are serving their customers and communities and OCC Acting Comptroller Hsu for proposing to rescind the amendments to the Community Reinvestment Act, which he referred to as "misguided."

Committee Ranking Member Toomey criticized the Biden administration's use of financial regulation to promote "social goals unrelated to banking." He expressed concern at OCC Acting Comptroller Hsu's decision to have the OCC join the Network for Greening the Financial System and NCUA Chair Harper's assertion that credit unions will have to consider "adjusting their fields of membership or altering lending portfolios," stating that such actions are rooted in politics, not actual risk assessment. Committee Ranking Member Toomey praised FDIC Chair McWilliams' revision to the agency's review process for deposit insurance proposals, highlighting its contribution to the uptick in de novo banks.

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