July is a busy month on Capitol Hill as lawmakers try to finish a number of priorities before both chambers of Congress go on the annual August recess. Lawmakers held hearings on a wide range of topics and worked to advance important nominees at banking agencies, the administration, and the SEC.
Fed Chair Powell Testifies to Congress
On July 9th and 10th the Chair of the Federal Reserve, Jay Powell, testified in front of the Senate Banking and House Financial Services Committees. During the hearings Chair Powell was questioned broadly on the state of the economy, inflation, and interest rates. Unfortunately, Chair Powell also expressed openness to reproposing the Basel III capital rules, which is what the industry’s massive lobbying and propaganda campaign has been pushing for. Chair Powell, like the industry, are wrong. Better Markets strongly supports the rule to increase capital requirements for the largest banks, which will help prevent Wall Street bailouts and protect Main Street. A strong rule should be finalized as soon as possible.
Senate Banking Holds Hearing with FDIC, SEC, and Treasury Nominations
On July 11th, the Senate Banking Committee held a Nominations hearing with Christy Goldsmith-Romero for Chair of the FDIC, Kristen Johnson for the Assistant Secretary of the Treasury, Caroline Crenshaw for SEC Commissioner, and Gordon Ito to be a Member of FSOC. These nominees are all extremely qualified for these positions and should be confirmed without delay.
House Financial Services Examines AI in the Financial Industry
On July 23rd, the House Financial Services Committee held a hearing to examine the use of AI in the financial industry. This follows a bipartisan report from the Committee released earlier this month which identifies how AI is being used across the financial sector. During the hearing, lawmakers across both sides of the aisle reiterated that while AI can have a positive impact on finance, it must follow traditional anti-bias and discrimination rules and regulations and ensure that strong consumer protections are in place. Ranking Member Maxine Waters also highlighted the need for increased disclosure on the use of AI by financial companies. You can read more on AI and Better Markets’ work on AI in the financial industry here.
Lawmakers Comment on Capital One/Discover Merger
The public comment period on the proposed Capital One/Discover merger closed this month, and lawmakers across Capitol Hill made comments skeptical of the merger. Chairman of the Senate Banking Committee, Sherrod Brown, wrote to regulators that a potential merger must ensure that workers and consumers are put first. He expressed concerns that the merger would decrease customer choice in the market by creating a new large conglomerate between the two companies. House Financial Services Ranking Member Maxine Waters commented during the public hearing that she opposed the merger. She noted that the merger would hurt competition, financial stability, and consumers. Better Markets agrees and you can read our comment letter on the proposed merger here.
