During remarks on the Senate floor Wednesday, Sen. Elizabeth Warren (D-MA) spoke about the nomination of Michelle Bowman to be Vice Chair of the Federal Reserve for Supervision.
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00:00Mr. President, I rise today to talk about the nomination of Michelle Bowman to be the
00:04Federal Reserve Board's Vice Chair for Supervision.
00:08Governor Bowman has served on the Federal Reserve Board since 2018, when she was confirmed
00:14as the first governor required to have community bank experience.
00:19But during her tenure, she has consistently prioritized Wall Street over Main Street.
00:25She has weakened safeguards on the largest banks in the country and has opposed common-sense
00:30rules to promote financial stability, to protect consumers, and to drive investment in communities
00:37across this country.
00:39And just yesterday, in another Wall Street giveaway, she voted to lift the asset cap that was placed
00:45on Wells Fargo in an effort to rein in Wells' decades-long track record of customer abuses.
00:54She did this despite the fact that there is no public evidence that Wells Fargo has substantially
01:01changed its approach to banking.
01:04Now Governor Bowman's actions have already imposed serious costs on small businesses and families.
01:11It would be especially dangerous to put her in charge of further deregulating Wall Street
01:18now, just as President Trump has pushed the economy to the edge of a cliff.
01:25Democrats on the Banking Committee unanimously opposed her nomination as Vice Chair for Supervision.
01:31And I urge all of my colleagues, Democrats and Republicans, to do the same now.
01:38In the years leading up to the 2008 financial crisis, the Federal Reserve Board effectively abdicated
01:45its statutory role as a financial regulator and supervisor.
01:50As a result, the agency was asleep at the wheel as dangerous risks built up in the financial
01:57system, especially in the subprime mortgage market.
02:02When the economy tumbled, families, small businesses, and even community banks suffered the consequences
02:10of the Fed's negligence.
02:13Congress established the Vice Chair for Supervision position after the 2008 financial crisis in
02:20order to ensure that the Fed never again ignored its financial regulation and supervision responsibilities.
02:30But in her six years on the Federal Reserve Board, Governor Bowman has hacked away, bit by
02:37bit at the safeguards put in place after the 2008 financial crisis.
02:45So let's take a look at her record.
02:47Governor Bowman has weakened critical safeguards for the largest Wall Street banks.
02:53She has voted to reduce big banks' loss-absorbing capital requirements, and she has voted to undermine
03:01the stress testing framework, both of which have left big banks more vulnerable to collapse.
03:08She has also voted to allow big banks to gamble with people's deposits in financial markets, including
03:15through increased investments in hedge funds and private equity funds.
03:20These actions have allowed Wall Street banks to take on riskier bets and juice their dividends, boost
03:28their buybacks, and pump up executive compensation, all at the expense of financial stability.
03:38Bowman also voted to deregulate massive banks with $100 billion to $250 billion in assets.
03:47That particular error in judgment came back to bite our country quickly, causing the second, third,
03:55and fourth-largest bank failures in U.S. history just a few years later, when these three deregulated
04:04banksāFirst Republic Bank, Silicon Valley Bank, and Signature Bankāall failed within weeks
04:11of each other in 2023.
04:15For a while, the entire banking system teetered on the edge of collapse.
04:21Now, instead of learning from that near catastrophe, Governor Bowman has refused to take any responsibility
04:29for her votes that led to this banking turmoil, and she has opposed common-sense rules to strengthen
04:37the resilience of large banks even after those failures.
04:43Governor Bowman also voted to approve more than 800 bank merger applications, including
04:49Morgan Stanley's major acquisition of E-Trade and Capital One's recent acquisition of Discover,
04:58which created the largest credit card company in America.
05:03Her lax approach to bank mergers undermines competition and increases concentration in
05:10the banking sector.
05:12And that, in turn, inflicts costs on consumers and threatens the stability of the entire banking
05:20system.
05:21It also poses a direct risk to the future of community banks in this nation.
05:29In addition, Governor Bowman opposed even modest improvements to the Community Reinvestment
05:35Act.
05:36This is a 50-year-old law that was created to prevent racist lending practices by big banks
05:43and to ensure that all communities have access to critical financial services.
05:50Last year, she was the only Fed governorāthe only oneāto vote against a rule that would
05:56have updated the CRA regulations for the first time in nearly 30 years and would have increased
06:04banks' investments in communities of color, in rural and native communities, and in other
06:11low- and moderate-income areas.
06:14Now, beyond her deeply troubling policy record, Governor Bowman has also demonstrated a worrisome
06:24lack of independence from the White House during her nomination process.
06:30For example, at her hearing, she refused to acknowledge any economic uncertainty created
06:38by President Trump's tariff policies.
06:41And she refused to concede any potential impact of those policies on U.S. financial stability.
06:49That refusal puts her at odds with Chair Powell, with the Fed's staff, and with economic experts
06:58across the political spectrum.
07:01It was clear that Governor Bowman did not want to be seen, even indirectly, criticizing
07:08President Trump.
07:11Ms. Bowman also stated that she plans to submit regulatory actions to the White House for review,
07:18which undermines the Fed's independence and all but guarantees a new deregulatory bonanza
07:27for these Wall Street banks.
07:30She has refused to answer questions about whether she met with then-President-elect Trump or his
07:36transition team while on an official Federal Reserve-funded trip to West Palm Beach in November
07:432024.
07:44Look, our economy is in a precarious moment.
07:50President Trump's disastrous mismanagement of this economy is raising costs for families,
07:57it's putting jobs at risk, and it's threatening to decimate small businesses across this country.
08:05Regulating Wall Street right now would throw gasoline on Trump's economic fire.
08:11The last thing that families and small businesses need is another massive financial crash.
08:19I urge my colleagues to oppose Michelle Bowman's nomination.
08:26Thank you, Mr. President.
08:27I yield the floor.