Brown Opening Statement at Treasury Secretary Mnuchin’s First Banking Committee Hearing

May 18, 2017

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – released the following opening statement at today’s hearing with U.S. Treasury Secretary Steven Mnuchin entitled, “Domestic and International Policy Update.” The hearing marks Mnuchin’s first testimony before the Banking Committee.

Brown’s remarks, as prepared for delivery, follow.

Senator Sherrod Brown – Opening Statement
Hearing: “Domestic and International Policy Update”
May 18, 2017 

Thank you, Chairman Crapo, for calling this hearing.  And thank you, Secretary Mnuchin, for joining us this morning.

The Treasury Department has played a key role in our government since its creation over two centuries ago. That role expanded in the wake of the Great Recession, when it became clear at great cost that the rules in place for the financial services industry were inadequate.

Given the greater role that the Treasury Secretary plays in oversight of Wall Street, it makes sense that he devote some of his time to conveying his views and those of the Administration on issues within this committee’s jurisdiction.

So far, that communication has been insufficient. Questions posed to the Secretary by me and other Senators have gone either unanswered, or answered by non sequiturs. So I hope today will give us an opportunity for more forthright conversations.

On Tuesday we had an ordinary hearing that — to my mind — was quite extraordinary. Three of the four nominees will work in national security positions in the Treasury if confirmed, the fourth at Commerce.

One Senator after another felt compelled to ask the nominees if they would put the law and the Constitution and their country ahead of loyalty to the President. Given all the troubling revelations from this White House, such a question is vital for every nominee in a sensitive position. 

And this was hours before we learned that President Trump very likely asked FBI Director Comey to shut down an investigation.

Honesty is critical. Our national interests are undermined – whether it is national security or economic security — when our leaders traffic in falsehoods. We cannot lead if we cannot be believed.

China was a champion of currency manipulation and then it wasn’t. Wealthy taxpayers would not get a tax cut and then they would.  The deficit would be eliminated in eight years and then it wouldn’t. 

Wall Street was getting away with murder but now it has too big a compliance burden.  The carried interest loophole would be closed but now maybe not.  We must immediately invest a trillion dollars in our “Third World” infrastructure but now there is no rush. No cuts to Medicaid but now a $900 billion cut is fine.

The President launched the examination of Dodd-Frank with the claim that creditworthy borrowers can’t get loans.  But the spigot isn’t dry.  Bank loans and profits are at record levels. These are facts that bear repeating. Bank loans and profits are at record levels.

This President was elected saying “Wall Street has caused tremendous problems for us. We’re going to tax Wall Street.”

Now that he is in office, he seems to have forgotten the tremendous problems that Wall Street created for middle class families across America.  He sacked a dedicated public servant for a bank lawyer to oversee the nation’s biggest banks, and he is threatening the Consumer Bureau — one of the only champions that consumers have in the executive branch.

Can we improve upon how we regulate the banks and the shadow banks and the rest of the financial services industry? Yes. I believe we can do so for smaller financial institutions. But let’s do so based on facts.

The fact is that one in five homeowners in the city of Cleveland holds a mortgage that is more than 125% of the value of their home.

The fact is that bank lending has grown 6 percent annually over the past three years, and loan growth at community banks was 8 percent this past year.  Lending stalled in the first quarter of this year because the demand was not there.

The fact is that U.S. households have more debt now than they did at the peak in 2008 – driven by increased auto and student debt.

The fact is that the wealthiest Americans may have recovered from the Great Recession, but many, many families — like those Cleveland homeowners — have not.

If we want to improve our economy, we would be better off debating how to create jobs through an effective means like infrastructure investment rather than the thoroughly discredited trickle down approach — whether achieved through the tax code or raising the speed limit for Wall Street.

Thank you, Mr. Chairman.

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