Newsroom
December 08, 2015
Lawmakers urge transparency, reg relief by FSOC members
Members of the House Financial Services Committee focused on issues of transparency and regulatory relief during a hearing on the Financial Stability Oversight Council Tuesday.
NCUA Chairman Debbie Matz, CFPB Director Richard Cordray and Federal Housing Finance Agency Director Mel Watt testified along with five other voting members of the FSOC, which was created by the Dodd-Frank Act and is headed by the Treasury secretary. The council is meant to identify risks to the financial system and designate organizations that are systematically important financial institutions (SIFIs).
Rep. Steve Stivers, R-Ohio, in particular focused on regulatory relief for credit unions and small banks. Stivers confirmed that no council members believed credit unions and small banks caused the financial crisis, and he asked how many hours the council devoted a year to discussions of regulatory relief for those institutions. Council members responded that such discussions mainly took place at a staff level.
"You're not discussing it enough at a council level," Stivers said, emphasizing that such institutions are "struggling to keep up."
Rep. Scott Garrett, R-N.J., criticized the council's lack of transparency and questioned the rules surrounding who is allowed to attend council meetings. Rep. Robert Pittenger, R-N.C., highlighted legislation he is introducing to require more transparency from the council.
Rep. Gregory Meeks, D-N.Y., raised the issue of housing reform to Watt and questioned the role of the private sector in reforming government-sponsored enterprises Fannie Mae and Freddie Mac. Watt responded that the FHFA is concerned about the private sector's capacity to absorb all the risk involved and that it believes government involvement is necessary to keep borrower costs down.
Matz defended the council's process of designating SIFIs and of including non-bank organizations such as insurance companies in the designation. She did not address credit union-specific regulation.
In advance of the hearing, NAFCU Vice President of Legislative Affairs Brad Thaler urged committee members against granting NCUA third-party vendor authority, as FSOC members have recommended doing.
NCUA Chairman Debbie Matz, CFPB Director Richard Cordray and Federal Housing Finance Agency Director Mel Watt testified along with five other voting members of the FSOC, which was created by the Dodd-Frank Act and is headed by the Treasury secretary. The council is meant to identify risks to the financial system and designate organizations that are systematically important financial institutions (SIFIs).
Rep. Steve Stivers, R-Ohio, in particular focused on regulatory relief for credit unions and small banks. Stivers confirmed that no council members believed credit unions and small banks caused the financial crisis, and he asked how many hours the council devoted a year to discussions of regulatory relief for those institutions. Council members responded that such discussions mainly took place at a staff level.
"You're not discussing it enough at a council level," Stivers said, emphasizing that such institutions are "struggling to keep up."
Rep. Scott Garrett, R-N.J., criticized the council's lack of transparency and questioned the rules surrounding who is allowed to attend council meetings. Rep. Robert Pittenger, R-N.C., highlighted legislation he is introducing to require more transparency from the council.
Rep. Gregory Meeks, D-N.Y., raised the issue of housing reform to Watt and questioned the role of the private sector in reforming government-sponsored enterprises Fannie Mae and Freddie Mac. Watt responded that the FHFA is concerned about the private sector's capacity to absorb all the risk involved and that it believes government involvement is necessary to keep borrower costs down.
Matz defended the council's process of designating SIFIs and of including non-bank organizations such as insurance companies in the designation. She did not address credit union-specific regulation.
In advance of the hearing, NAFCU Vice President of Legislative Affairs Brad Thaler urged committee members against granting NCUA third-party vendor authority, as FSOC members have recommended doing.
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