[Congressional Record Volume 166, Number 7 (Monday, January 13, 2020)]
[House]
[Pages H189-H192]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PRUDENTIAL REGULATOR OVERSIGHT ACT
Ms. WATERS. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 4841) to require the prudential banking regulators to
provide annual testimony to Congress on their supervision and
regulation activities, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4841
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prudential Regulator
Oversight Act''.
SEC. 2. ANNUAL TESTIMONY.
(a) In General.--The Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5301 et seq.) is amended
by adding at the end of title VI the following:
``SEC. 629. ANNUAL TESTIMONY OF PRUDENTIAL REGULATORS.
``(a) Semi-annual Report.--
``(1) In general.--The prudential regulators shall each
issue a semi-annual report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives regarding
the efforts, activities, objectives, and plans of the
regulator with respect to the conduct of supervision and
regulation of depository institution holding companies,
depository institutions, and credit unions.
``(2) Specific contents.--Each report required under
paragraph (1) shall include a description of--
``(A) the safety and soundness of depository institution
holding companies, depository institutions, and credit
unions, including capital, liquidity, leverage, stress
testing, and living wills, as applicable;
``(B) the examination and supervision of depository
institution holding companies, depository institutions, and
credit unions, particularly G-SIBs, including--
``(i) a detailed description of public enforcement actions
taken during the reporting period;
``(ii) aggregate data regarding supervisory concerns
examiners have issued in writing to the boards of regulated
institutions during the reporting period;
``(iii) supervisory observations by the regulator on
particular areas and topics of concern identified through the
examination and supervisory process; and
``(iv) a description of the regulator's exercise of all
available tools beyond imposing public fines to ensure
compliance with all applicable laws and regulations, as well
as actions to ensure accountability for culpable executives;
``(C) emerging risks that may affect depository
institutions and potential threats to the financial stability
of the United States, and any actions the regulator took in
coordination with the Office of Financial Research, to
identify and mitigate those threats;
``(D) any recent actions taken by the regulator as a voting
member of the Financial Stability Oversight Council and any
updates related to authorities the regulator has under title
I or title VIII of this Act with respect to enhanced
prudential standards and supervision of large bank holding
companies and firms designated by the Financial Stability
Oversight Council;
``(E) the implementation of the regulator's diversity and
inclusion efforts, including its implementation of section
342 of this Act and the regulator's compliance with section
308
[[Page H190]]
of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 with respect to minority depository
institutions;
``(F) the implementation of the Community Reinvestment Act
of 1977, including information on examinations, guidance, and
regulations;
``(G) any mandatory provision of law that has not been
implemented yet by the regulator, including the date on which
the mandatory provision will be implemented;
``(H) an overview of the mergers and acquisitions process,
including data and descriptions of any mergers and
acquisitions approved during the reporting period;
``(I) examinations for Bank Secrecy Act and anti-money
laundering compliance, as well as coordination with the
Financial Crimes Enforcement Network and appropriate
communication with depository institutions and credit unions;
``(J) the utilization of financial technology as it relates
to depository institution holding companies, depository
institutions, and credit unions regulated by the regulator,
including the use of various technologies by depository
institutions and credit unions as well as partnerships with
third-party companies;
``(K) cybersecurity of depository institution holding
companies, depository institutions, and credit unions,
including steps taken to enhance cyber readiness and
strengthen the protection of consumer data; and
``(L) compliance with chapter 5 of title 5, United States
Code (commonly referred to as the `Administrative Procedure
Act') and chapter 8 of title 5, United States Code (commonly
referred to as the `Congressional Review Act'), as well as
all guidance documents and rulemakings issued by the
prudential regulator in the previous 6-month period.
``(3) Confidentiality requirement.--Each report required
under paragraph (1) shall include only information that does
not constitute confidential supervisory information about a
specific institution, but may include aggregate information
on an industry-wide basis or on a segment of an industry.
``(b) Testimony.--
``(1) In general.--The prudential regulators shall each
appear before the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives at an annual hearing to
testify with respect to the reports required under subsection
(a).
``(2) Vice chairman for supervision.--The Vice Chairman for
Supervision of the Board of Governors shall appear before the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives at a semiannual hearing to testify with
respect to the reports required under subsection (a). Any
such appearance shall satisfy the requirements of section
10(12) of the Federal Reserve Act.
``(c) Definitions.--In this section:
``(1) Bank secrecy act.--The term `Bank Secrecy Act'
means--
``(A) section 21 of the Federal Deposit Insurance Act;
``(B) chapter 2 of title I of Public Law 91-508; and
``(C) subchapter II of chapter 53 of title 31, United
States Code;
``(2) G-SIB.--The term `G-SIB' means a global systemically
important bank holding company, as such term is defined under
section 217.402 of title 12, Code of Federal Regulations.
``(3) Prudential regulators.--The term `prudential
regulators' means the Vice Chairman for Supervision of the
Board of Governors, the Comptroller of the Currency, the
Chairperson of the Corporation, and the Chairman of the
National Credit Union Administration Board.''.
(b) Clerical Amendment.--The table of contents under
section 1(b) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act is amended by inserting after the
item relating to section 628 the following:
``Sec. 629. Annual testimony of prudential regulators.''.
SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the House Budget Committee, provided that such
statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
California (Ms. Waters) and the gentleman from Arkansas (Mr. Hill) each
will control 20 minutes.
The Chair recognizes the gentlewoman from California.
General Leave
Ms. WATERS. Madam Speaker, I ask unanimous consent that all Members
have 5 legislative days within which to revise and extend their remarks
on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from California?
There was no objection.
Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise in strong support of H.R. 4841, the Prudential
Regulator Oversight Act, which is sponsored by Representative Dean
Phillips of Minnesota, one of our new members of the Financial Services
Committee. Through Representative Phillips' good work, this is a
bipartisan bill.
H.R. 4841 would require the prudential regulators, specifically, the
Board of Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation,
and the National Credit Union Administration to report semiannually to
and testify annually before Congress on their supervisory and
regulatory activities.
The Federal Reserve Vice Chairman for Supervision would continue to
testify semiannually before Congress, though the new annual testimony
mandate would satisfy one of the semiannual requirements.
While the OCC, FDIC, NCUA currently do not have a mandatory testimony
requirement like the Federal Reserve, receiving periodic testimony from
all four agencies would allow for a comprehensive examination of the
state of prudential regulation, supervision, and enforcement with
respect to megabanks and other depository institutions.
These reports and testimony will enhance the committee's efforts to
oversee the regulators' work on a range of issues, including their
efforts to hold megabanks accountable and promote diversity and
inclusion.
I will highlight that Representative Phillips made a few improvements
to the bill to ensure that no confidential supervisory information is
disclosed. The changes would still ensure Congress gets important
aggregate data and general trends on supervisory concerns, like Matters
Requiring Attention and Matters Requiring Immediate Attention, that
apply to the industry or segments of the industry.
It is also worth noting that before Democrats took the House majority
in 2019 and provided vigorous oversight of these prudential regulators,
it had been more than 3 years since either the FDIC or the NCUA
testified before the Financial Services Committee.
Congress must not neglect its oversight duties, so H.R. 4841 will
help ensure that we have robust and regular oversight of our prudential
regulators.
Madam Speaker, I urge Members to support this legislation, and I
reserve the balance of my time.
Mr. HILL of Arkansas. Madam Speaker, I yield myself such time as I
may consume.
Madam Speaker, first of all, happy new year to our chairwoman of the
full committee. I am glad to see the gentlewoman on the floor today on
this good set of bills that she has worked hard to produce, a
bipartisan solution to so many important topics.
I rise in support of H.R. 4841 today, and I thank the gentleman from
Minnesota (Mr. Phillips) and the gentleman from Georgia (Mr.
Loudermilk) for offering this legislation.
If there is one key point that the Republicans and Democrats can
agree on in the post-2008 crisis, it is that increased dialogue and
transparency on safety and soundness of institutions, and monitoring
emerging risks and potential threats to financial stability, can better
promote understanding of the most concerning issues facing our American
financial system, the broader economy, and how to make sure that
America can keep its leadership in the world in competitive financial
services. Certainly, an active Financial Stability Oversight Council is
an example of that, and this measure, H.R. 4841, is a key tool as well.
It will require Federal financial regulators to appear at least
annually before the House Financial Services Committee and the Senate
Banking Committee to provide testimony on their oversight of financial
institutions, including regulatory, supervisory, and enforcement
activities.
Under this bill, the regulators will also be required to produce
semiannual reports to Congress on these efforts.
Although the Federal Reserve Chairman, the Federal Reserve Vice
Chairman for Supervision, and the Director of the Consumer Financial
Protection Bureau are required to testify before Congress semiannually,
similar requirements do not exist for the Comptroller of the Currency,
the Chair of
[[Page H191]]
the FDIC, or the Chair of the National Credit Union Administration.
Last year, the principals from the prudential regulatory agencies,
the OCC, the FDIC, and National Credit Union Administration, willingly
and happily testified alongside the Federal Reserve Vice Chair for
Supervision during his statutorily required appearance.
Committee Republicans recognize that it is good practice to have open
and regular conversations with our prudential regulators on topics
concerning the integrity of the U.S. and global financial systems. This
practice is important, regardless of which party is in power.
Merger and acquisition trends, BSA/AML exams, fintech, Bank Secrecy
Act, anti-money-laundering exams and trends, the use of financial
technology, cyber threats and planning for cyber protection and
compliance issues, generally, all of these are important topics.
I thank the gentleman from Minnesota for working in a bipartisan way
to address some modest concerns the Republicans had with the initial
draft. We were able to make simple changes that clarify the parameters
for the release of information by Federal banking regulators.
This result is a bill focused on good government and increased
transparency. I thank the gentleman from Minnesota and his colleague,
Mr. Loudermilk from Georgia. I urge my colleagues to support H.R. 4841,
and I reserve the balance of my time.
Ms. WATERS. Madam Speaker, I reserve the balance of my time.
Mr. HILL of Arkansas. Madam Speaker, I yield 2 minutes to the
gentleman from Ohio (Mr. Gonzalez), my good friend who supports this
legislation.
Mr. GONZALEZ of Ohio. Madam Speaker, I rise in support of H.R. 4841,
the Prudential Regulator Oversight Act. I was pleased to cosponsor this
bill introduced by my good friend and colleague, Mr. Dean Phillips.
The Federal Reserve, NCUA, FDIC, and OCC play a vital role in
developing a regulatory framework that promotes economic growth and
sound regulator policies in all of our communities.
It is important that these regulator bodies hear from Members on both
sides of the aisle on how different policy decisions will impact our
constituents. It is also important that Members of Congress ask
questions and provide oversight on the regulators' activities.
H.R. 4841 will require the prudential regulators to come before the
Financial Services Committee and Senate Banking Committee on an annual
basis. They will also support various reports to the committees of
jurisdiction twice a year.
{time} 1715
This includes reports on issues like soundness of depository
institutions, compliance with anti-money laundering, and the
utilization of fintech at financial institutions. This will help
lawmakers better understand trends in the financial industry and
identify potential policy proposals in response to issues facing our
country.
Again, I want to thank Congressman Phillips for his hard work on this
bill and thank Chairwoman Waters and Ranking Member McHenry for
bringing it to the floor today. I encourage my colleagues to support
this legislation.
Mr. HILL of Arkansas. Madam Speaker, I reserve the balance of my
time.
Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentleman from
Minnesota (Mr. Phillips), a valuable member of the Financial Services
Committee and the sponsor of this legislation.
Mr. PHILLIPS. Madam Speaker, I thank the gentlewoman from California
for yielding and for her leadership of the House Financial Services
Committee and my friend and colleague from Ohio (Mr. Gonzalez) for his
kind words about this bill.
Madam Speaker, I rise today in support of my bill, H.R. 4841, the
bipartisan Prudential Regulator Oversight Act.
In the United States, we have thousands of institutions where
millions of people go every day to do their daily banking, take out a
loan for a new car, or start saving for their children's future. It
does not matter if you live in Bloomington, Minnesota, or Brooklyn, New
York, the process is the same.
Virtually all of these institutions are federally insured and, thus,
subject to at least one primary Federal regulator. Yet few of these
regulators are actually required to provide testimony on their
supervisory responsibilities in Congress.
When the Dodd-Frank Act was passed in 2010 in response to the
financial crisis, it became a requirement and an expectation that
Congress would hear from the leaders of the Federal Reserve at regular
intervals regarding its efforts, activities, and plans with respect to
their supervisory conduct.
Today, there is no such requirement for regulators at the FDIC, the
National Credit Union Administration, or the Office of the Comptroller
of the Currency. These agencies are responsible for monitoring the
safety and soundness of our financial system as well as compliance with
Federal banking laws approved by this body. They play a large role in
protecting taxpayers by promoting bank solvency and intercepting and
preventing bank failures. These are the very institutions charged with
helping prevent market crashes before they begin.
H.R. 4841 would require senior officials of the prudential banking
regulators to report to and testify before the House and Senate on
their regulatory responsibilities. These reports would cover issues
like the stability of our financial system, anti-money laundering
examinations, diversity and inclusion programs, cybersecurity, and
efforts to protect consumer data.
The reports and testimony required by this bill will increase
Congress' oversight ability, allowing this institution to more
responsibly exercise our legislative powers by knowing with clarity how
programs are administered and whether officials are obeying and
complying with the law.
The SPEAKER pro tempore. The time of the gentleman has expired.
Ms. WATERS. Madam Speaker, I yield an additional 1 minute to the
gentleman from Minnesota (Mr. Phillips).
Mr. PHILLIPS. Congress has an important role to play in ensuring that
Americans know their government is doing everything it can to protect
their savings and their retirement, and this bill will help us get
there.
I want to thank my colleagues who have cosponsored this bill and
given their support, including my friend from Georgia (Mr. Loudermilk),
who has been a great partner in helping this legislation get to the
floor.
There is a saying that sunlight is the very best disinfectant. Every
American knows that banking is complicated, and no institution is too
big for oversight. I urge my colleagues to vote for H.R. 4841, increase
transparency, and solidify Congress' role in achieving financial
stability throughout the country.
Mr. HILL of Arkansas. Madam Speaker, I yield myself the balance of my
time.
I want to urge my colleagues to support H.R. 4841. It is an excellent
piece of bipartisan work that certainly speaks to the heart of Article
I power, which is oversight over the executive. I congratulate Mr.
Phillips and Mr. Loudermilk for their work.
Madam Speaker, I yield back the balance of my time.
Ms. WATERS. Madam Speaker, I yield myself the balance of the time.
In closing, it is important that Congress conduct regular oversight
of independent regulatory agencies like the OCC, the FDIC, and NCUA to
ensure they are fulfilling the mission Congress gave them.
Mr. Phillips' bipartisan bill, the Prudential Regulator Oversight
Act, will ensure Congress gets periodic updates on a range of issues,
including prudential regulator efforts to hold megabanks accountable
and promote diversity and inclusion.
Madam Speaker, I urge Members to support H.R. 4841, and I yield back
the balance of my time.
Mr. LOUDERMILK. Madam Speaker, I rise in support of H.R. 4841, the
Prudential Regulator Oversight Act. First, I would like to thank Mr.
Phillips for his leadership on this bipartisan bill and for being
willing to address Republicans' concerns with some of the language that
was in the original text. Mr. Phillips has worked diligently to address
committee Republicans' views before, during, and after the markup, and
as a result, this is a strongly bipartisan bill.
[[Page H192]]
This bill is about transparency and oversight of the federal banking
regulators. It would require the Comptroller of the Currency, Federal
Deposit Insurance Corporation Chair, and National Credit Union
Administration Chair to testify before the House Financial Services
Committee and the Senate Banking Committee annually. The bill would
harmonize that requirement with the existing requirement for the
Federal Reserve Vice Chair for Supervision to testify twice a year. The
bill would also require these agencies to submit reports about their
activities to Congress twice a year. I appreciate that Mr. Phillips
agreed to add several clarifications in the bill to ensure that
confidential supervisory information is not included in these reports.
Requiring these regulators to testify every year will help ensure
that Congress is having a regular dialogue with these agencies. This
will foster greater transparency into the agencies' activities and
assist Congress in doing its job of conducting robust oversight of
federal regulators. Some may question why this bill is needed, because
all of these regulators testified before the Financial Services
Committee in May of last year. However, it had been three and a half
years since anyone from the FDIC or NCUA had testified at the committee
before that hearing.
As the Ranking Member of the Artificial Intelligence Task Force, I
also appreciate that the bill requires the banking regulators to report
to Congress about financial institutions' use of fintech,
cybersecurity, and BSA/AML compliance. These are important issues that
Congress must continue to monitor.
Requiring annual testimony is a matter of good government and
Congress doing its job of overseeing the regulatory agencies that it
has created.
I ask all of my colleagues to support this bill.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from California (Ms. Waters) that the House suspend the
rules and pass the bill, H.R. 4841, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________