[Congressional Record Volume 164, Number 86 (Thursday, May 24, 2018)]
[Senate]
[Pages S2892-S2893]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                    Confirmation of Brian Montgomery

  Ms. WARREN. Mr. President, Donald Trump promised during his inaugural 
address to fight for ``the forgotten men and women of our country,'' 
but in Donald Trump's Washington, the Senate sits on its hands as the 
revolving door spins faster and faster. Brian Montgomery is just the 
latest in a line of bankers, lawyers, investors, and consultants who 
cashed in on their big-time public service and now want back in.
  Mr. Montgomery has just been confirmed to be the Commissioner of the 
Federal Housing Administration, the FHA, which provides taxpayer-backed 
insurance that helps millions of Americans buy homes they might not 
otherwise be able to afford. Lenders make loans to these families 
because the FHA gives them some protection in case the families 
default. Like any insurance, there are strict rules about who 
qualifies. Unless it is managed well, the FHA could expose taxpayers to 
a risk of billions of dollars in losses.
  Mr. Montgomery knows something about the FHA. He was the Commissioner 
from 2006 to 2009 while the housing market was flying high and when it 
all came crashing down. Since almost the day he left, he has been 
making buckets of money selling his knowledge to banks who broke the 
rules and are trying to escape the consequences.
  Here is what I mean. One month after leaving the FHA, Mr. Montgomery 
founded and became vice chairman of a new company called Collingwood 
Group which, according to reports, was known in the housing finance 
industry as a specialist in helping firms navigate FHA-related 
penalties and lawsuits. Who better to navigate the rules of the FHA 
than the guy who used to be in charge of the FHA?
  One of Collingwood's clients was Wells Fargo. They were in trouble 
for defrauding FHA, and in 2016 paid HUD a $1.2 billion fine. That is 
billion with a ``b.'' Wells Fargo admitted that from 2001 to 2008, it 
had lied to the FHA about whether certain loans were eligible for FHA 
insurance. Mr. Montgomery was in charge of the FHA from 2006 to 2008 
and let that fraud happen. After he left, he went to the other team, 
giving Wells Fargo the inside scoop on how to beat the rap.
  Collingwood also represented U.S. Bank. In 2014, U.S. Bank paid $200 
million for defrauding FHA. In its settlement, U.S. Bank admitted that 
``from 2006 through 2011, it repeatedly certified for FHA insurance 
mortgage loans that did not meet HUD underwriting requirements.'' The 
taxpayers paid Mr. Montgomery to manage the FHA for 3 of those years, 
and he didn't stop the fraud. When he left, U.S. Bank paid him to help 
them get away with it. I guess it pays to be an inside guy.
  I have seen some amazing cases of people spinning through the 
revolving door, but this one might take the cake. First, Montgomery 
runs an agency that puts taxpayer money on the line. While there, he 
looks the other way as the banks submit piles of fraudulent mortgages. 
The government then loses millions and millions of taxpayer dollars. 
Then, Mr. Montgomery waltzes right out the door and 1 month later 
starts a company advising the same big banks on how to pay the 
government back as little as possible for frauds they committed on his 
watch.
  Look, he may have the best of intentions, but we can never expect the 
American people to trust Washington if we approve nominees like Mr. 
Montgomery. It is bad enough that he put taxpayer money at risk by 
looking the other way as the banks committed fraud and then bad enough 
that he got rich working for those same banks. Now the Senate is 
letting him go back and do it all over again? No way. It is finally 
time to crack down on the revolving door.
  Mr. President, 10 years ago, as the economy lurched toward a 
financial crisis, millions of American families braced for the impact. 
Over the next few years, almost 9 million families lost their jobs and 
millions more lost their homes and their savings. Giant banks--pillars 
of Wall Street for generations--crumbled, bringing communities across 
this country with it.
  In the aftermath of the crisis, Congress passed commonsense rules to 
make sure Wall Street could never again crash the economy and leave 
American families with the wreckage, but Donald Trump thinks that Dodd-
Frank is ``a disaster,'' and he has promised to do a ``big number'' on 
the safeguards it created. He hired an army of bankers and bank lawyers 
from Wall Street to do the deed, and now Jelena McWilliams is the 
latest piece in the puzzle.
  Here is just one example. In the runup to the crisis, giant banks 
proved to be terrible judges of risk and ended up sucking down billions 
of dollars in taxpayer bailouts just to survive. To fix this, Dodd-
Frank directed the banking regulators to set strong capital standards 
that limited how much risk the big banks could load up on and required 
them to hold enough cushion to survive in case their bets went bad.
  Policymakers and regulators from both sides of the aisle agree that 
these financial regulations made our economy safer. Former FDIC Chair 
Sheila

[[Page S2893]]

Bair and former Vice Chairman Thomas Hoenig--both Republican 
appointees--recently wrote in the Wall Street Journal that gutting 
capital rules ``would weaken system resiliency.'' Current FDIC Chair 
Martin Gruenberg--a Democrat--said that strong capital requirements 
were ``among the most important post-crisis reforms'' and has opposed 
joint efforts by the Fed and the Treasury to undermine them.
  Ms. McWilliams would drop that opposition. In fact, she is not even 
sure there was anything wrong with the capitalist standards before the 
crisis. That is not the only rule she would roll back. Donald Trump's 
Wall Street mercenaries have taken aim at a lot of critical post-crisis 
rules, and everything we know about Ms. McWilliams suggests she will 
support those efforts. Here is what is on the agenda.
  First, there is the Volcker rule, which prohibits bank deposits from 
gambling with Grandma's checking money. Banks are looking to scrap this 
rule, even though they are raking in literally record profits, but the 
FDIC has to agree before there are any changes. As soon as Ms. 
McWilliams is confirmed, bingo. Sorry, Grandma.
  Next is guidance that prevents banks from offering abusive, short-
term loans similar to payday loan products. The OCC has told the banks 
it regulates to have at it. With Ms. McWilliams in charge, it is only a 
matter of time before the FDIC banks get in the game.
  Third, there is also the Community Reinvestment Act, the CRA, which 
is designed to make sure a bank serves all credit-worthy customers in 
its community, regardless of the color of their skin. Lending 
discrimination is rampant in America, even though 98 percent of banks 
pass their CRA exams, but banks and the Trump appointees they send to 
Washington want to make the test for passing even easier. Under Ms. 
McWilliams, the FDIC evidently will not stand in the way.
  I could go on and on, but here is the thing. It is not just that I 
disagree with Ms. McWilliams or think her actions will make consumers 
and our economy less safe; it is that Senate Republicans are stacking 
the deck to allow Ms. McWilliams to make these decisions without any 
discussion.
  The five-member FDIC Board is supposed to be split between 
Republicans and Democrats, but the Senate is moving to confirm Ms. 
McWilliams before the White House has even nominated a Democratic Vice 
Chair for the agency. If Ms. McWilliams moves forward, the FDIC will be 
under complete Republican control for an indefinite amount of time. 
Democrats should oppose the McWilliams nomination on this basis alone.
  Ms. McWilliams is the latest Trump appointee who thinks the biggest 
problem with our financial rules is that the government is just too 
darn hard on the banks. Most Americans don't feel that way. They want 
tougher rules on Wall Street, not weaker ones. We should listen to them 
because they are the ones who pay the price when things go wrong on 
Wall Street.
  I urge my colleagues to vote no.
  I yield the floor.
  Mr. SHELBY. Mr. President, I rise today in support of Jelena 
McWilliams to be the Chair of the Federal Deposit Insurance 
Corporation.
  A native of the former Yugoslavia, Jelena earned her bachelor's 
degree and J.D. from the University of California at Berkeley. From 
tough experiences that her family shared in Europe, Jelena understands 
the value hard work provides in a free market environment like ours.
  The FDIC plays an important role in ensuring consumer confidence in 
our Nation's banks. In addition to their work as the prudential 
regulator for State-chartered banks, the FDIC is also a key part of 
many interagency efforts to appropriately regulate financial 
institutions.
  Due to her vast experience, Jelena is beyond qualified for this 
esteemed position. To put it clearly, she has worked in all fields that 
interact with her new role. She is certainly no stranger to the Senate. 
During my time as chairman, Jelena served as chief counsel and deputy 
staff director of the Senate Banking Committee. Additionally, she was 
assistant chief counsel on the Senate Small Business Committee and has 
experience working for the Federal Reserve. Jelena also has private 
sector experience as an attorney in private practice. She also served 
as executive vice president, chief legal officer, and corporate 
secretary for Fifth Third Bank.
  Opposition to her nomination is unfathomable. Ms. McWilliams was 
reported out of the Banking Committee by a voice vote in February. She 
understands all sides of the areas she will regulate with the highest 
level of sophistication. However, that has not prevented Members of 
this body from being unreasonable. Opposition has appeared due to the 
nature of the Senate today, not due to any question regarding Jelena's 
qualification for the job.
  Passage of her nomination builds on positive moment this week. With 
the passage of S. 2155, Congress has advanced appropriate scaling back 
of over-burdensome financial regulations. By confirming Jelena, the 
Senate has the opportunity to continue providing Main Street with 
commonsense regulatory relief. I am certain that Jelena is up for the 
challenge and confident that she will do an excellent job in this 
esteemed position.
  The PRESIDING OFFICER. The majority whip.