Sen. Sherrod Brown (D-OH) has forwarded correspondence to Federal Reserve Chair Jerome Powell, encouraging the panel to take no further banking industry deregulation action until Board nominations are made.
Officials noted President Joe Biden is slated to submit nominees for upcoming Board terms.
“When Vice Chair Quarles was confirmed to his position, banking lobbyists cheered,” Brown,
chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, wrote regarding Randal K. Quarles’s vice chair For Supervision Term expiring. “Not only did he immediately set out a plan to shift post-crisis rules to benefitting industry interests over protecting working families, he dutifully continued his deregulatory efforts, even as the economy was shaken by a global pandemic. I am deeply concerned about these efforts during a global economic crisis.”
Brown maintains a new direction for financial regulation must be determined by whomever the President chooses, and Congress confirms, to positions on the Board.
“Throughout the pandemic, despite warnings from regulatory experts, Congress, and even members of the Board, deregulation of critical capital and liquidity rules for a host of risky bank activities continued, even as unemployment reached its highest level since we began tracking it in 1948,” Brown concluded.
Brown added that while Fed officials have said the current capital levels are relatively high, this ignores the “enormous interventions” the Fed took during the pandemic to shore up credit markets and provide a backstop to the entire financial system, as the Federal Reserve Bank of Minneapolis has pointed out.