Waters to Yellen: “Wall Street Is Peddling Lies About What Needed Capital Reforms Will Do”
Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, delivered the following opening statement during a full committee hearing entitled, “The Annual Report of the Financial Stability Oversight Council.”
WASHINGTON, D.C. – Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, delivered the following opening statement during a full committee hearing entitled, “The Annual Report of the Financial Stability Oversight Council.”
Treasury Secretary Yellen and President Biden’s economic team have been hard at work to turn the tide on the disastrous economy that the twice-impeached, four-times criminally-indicted former President left us. The numbers show their hard work is finally paying off:
· In 2023, the unemployment rate remained below 4%, and the economy created a whopping 2.7 million new jobs – more than in any year of the Trump Administration;
· Inflation has fallen to the pre-pandemic level of 2% over the last 6 months;
· 16 million small businesses have been created, and twice as many Black households own a business;
· Workers’ wages and wealth are higher now than before the pandemic began, with income up nearly 4% last year after adjusting for inflation.
To top it off, consumers’ confidence is returning to our nation’s economy, and they are shopping and traveling again. There is certainly more work to do to address the housing affordability crisis, but the Biden Administration has masterfully guided the United States to the fastest economic rebound from the pandemic of any wealthy country in the world.
Of course, this progress would not be possible if it were not for Secretary Yellen’s strong leadership, and that of President Biden’s banking regulators, who decisively prevented harm to our financial system after the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank. Make no mistake, the seeds of that banking crisis were planted by Trump and his bank regulator’s deregulation of regional banks. Less than a year later, it’s a shame that Republicans have teamed up with Wall Street to spread misinformation and try to block efforts to strengthen capital at our nation’s biggest banks.
Wall Street is peddling lies about what needed capital reforms will do, going as far as taking out expensive TV and social media ads, and even setting up a website to purportedly educate the public, except it is filled with misleading claims. What they don’t want you to know is that the only people who benefit from lower capital requirements are the wealthy bank executives. Less capital means consumers are left more vulnerable, especially in a downturn, while bank execs take home bigger bonuses each year. Lower capital requirements also mean that taxpayers are more likely to be called on to bail these banks out when they run into trouble.
Let’s be clear, research overwhelmingly shows that well-capitalized banks lend more than other banks in good times and in bad. I’m sure the Secretary will set the record straight about how these capital reforms will ensure first-time homebuyers, small business owners, and communities of color looking to build wealth can better access credit and prevent future bank crises.
Finally, I want to applaud the Financial Stability Oversight Council for updating its designation procedures to ensure the Council can use all its tools to protect our economy. I also applaud the Council for continuing the work Committee Democrats started by guarding us against risks from Artificial Intelligence, cryptocurrencies, and climate change.
I’m so proud to see Secretary Yellen here today. Thank you for all you have done, and your leadership. I look forward to today’s hearing and yield back.