November was a busy month on Capitol Hill, with the House getting back to Committee work after electing a new Speaker. The House and Senate held important oversight hearings for the banking regulators and continued to look into the relationship between crypto and illicit finance. Additionally, a short-term funding bill was passed and signed into law that ensures the government stays open through the new year.
Bank Regulators Oversight Hearings
In November, both the House Financial Services Committee and the Senate Banking Committee held their biannual oversight hearings for the banking regulators. Officials from the Fed, FDIC, OCC, and NCUA all testified on back-to-back days giving Congress updates on their respective agencies. The hearings covered a number of key topics, such as bank capital requirements, the aftermath of the banking crisis earlier this year, and the recent reports of workplace misconduct at the FDIC. With new bank capital requirements top of mind, regulators consistently pointed out that these rules would only apply to the 37 largest banks in the country, not community banks that serve many small businesses. House and Senate Democrats defended the necessity of the rules to protect American consumers and communities from risky banking activity.
Congress Reacts to the FDIC WSJ Report
After a Wall Street Journal article reporting sexual harassment and workplace misconduct at the FDIC, Senate Banking Chair Sherrod Brown and all Committee Democrats joined in a letter to the FDIC Inspector General calling for a full independent investigation of the allegations. Better Markets has also called for a full unbiased investigation into the very serious allegations brought up in the article.
Illicit Finance Crypto Hearing
On November 15th the House Financial Services Digital Assets and Fintech Subcommittee held a hearing on crypto’s use in illicit finance. This hearing comes as the industry continues to try and distance itself from reports that Hamas used crypto to fundraise and evade sanctions prior to the terrorist attacks on Israel last month. Better Markets issued a Fact Sheet that refutes industry talking points that crypto is traceable and explains how transparency claims are a myth. We also created a Fact Sheet earlier this year that explains how and why all sorts of criminals use crypto for their illicit activities. While the crypto industry has yet to give a credible use case for crypto, terrorists and criminals continue to use the technology to their advantage. The good news is that prosecutors and regulators continue to enforce the law, with the Binance settlement being the latest criminal action, although we pointed out that the crime spree will continue until individual executives are put in jail and suffer bankrupting fines.
