December 22, 2023

Banking and Housing Committee Democrats Year-End Recap and Next-Year Outlook

Date: December 22, 2023

To: Reporters and Editors

From: Committee on Banking, Housing, and Urban Affairs Majority Staff

Re: Banking and Housing Committee Democrats Year-End Recap and Next-Year Outlook

Today, U.S. Sen. Sherrod Brown (D-OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, released the following statement and memo on the Committee’s accomplishments of the past year, as well as priorities for the final year of the 118th Congress. 

“2023 was another year of putting working families first and holding big banks and special interests accountable when they risk consumers’ money, drive up local housing prices and rents, and threaten our economy,” said Brown.

Brown added, “In 2024, this Committee will work to get our bipartisan priorities, the RECOUP Act and the FEND Off Fentanyl Act, over the finish line and signed into law and to build on our work to lower the cost of housing. We’ll stand up to China, we’ll root out illicit financing of terrorism, and we’ll keep working to protect Americans from corporate fraud and abuse – whether it’s payday lenders, crypto scams, or corporate price gouging.”

The following are the Committee's accomplishments over the last year:

2023 COMMITTEE HIGHLIGHTS

This year, the Committee held 28 hearings and 12 Subcommittee hearings. The Committee also confirmed 10 nominees this year.

PROTECTING MAIN STREET, NOT WALL STREET

HOLDING BANKS ACCOUNTABLE FOR THEIR FAILURES: Chairman Brown led the Banking and Housing Committee in a bipartisan effort to hold failed bank executives accountable in the wake of Silicon Valley Bank and Signature Bank failures in March. The Committee brought the CEOs of failed banks, including Greg Becker of Silicon Valley Bank and Scott Shay of Signature Bank, before the Committee to hold them accountable for their mismanagement. The Committee also held two oversight hearings with financial regulators to examine their response to the bank failures and the impact on financial stability, supervision, and consumer protection.

Other work the committee did in response to the bank failures included a hearing on executive accountability for bank failures, and a hearing on deposit insurance reform as a result of the bank failures. 

RECOUP ACT: The Committee’s response to the bank failures led to the introduction and markup of Chairman Brown’s and Ranking Member Tim Scott’s bipartisan Recovering Executive Compensation Obtained from Unaccountable Practices (RECOUP) Act. The bill would protect the American taxpayer and hold senior executives of failed banks accountable by clawing back their compensation, penalizing them for their misconduct, and directing banks to strengthen corporate governance standards. The bill passed out of Committee with overwhelming bipartisan support in an historic markup in June.

The RECOUP Act will:

  • Strengthen regulators’ ability to bring actions against executives who fail to appropriately oversee and manage their bank.
  • Require banks to adopt corporate governance and accountability standards that promote responsible management.
  • Provide the FDIC authority to claw back compensation of failed bank senior executives.
  • Increase and strengthen certain penalties against bad actors.

SAFER BANKING ACT: The Committee passed the SAFER Banking Act in September with bipartisan support. The bill would allow banks and credit unions to serve cannabis businesses and their workers in states where cannabis is legal.

STOP PREDATORY INVESTING ACT: In response to out-of-state investors buying up single-family homes across the country, Senator Brown introduced a bill to restrict tax breaks for big corporate investors that buy up homes, often driving up local housing prices and rents. The Stop Predatory Investing Act would prohibit an investor who acquires 50 or more single-family rental homes from deducting interest or depreciation on those properties. The bill restricts tax breaks for private equity firms and other large investors that currently give them an advantage in the market for affordable single-family homes, and helps give families a better chance at homeownership.

“In too many communities in Ohio, big investors funded by Wall Street buy up homes that could have gone to first-time homebuyers, then jack up rent, neglect repairs, and threaten families with eviction,” said Brown. “Our bill will help prevent corporate landlords from driving up local housing prices, and put power back in the hands of working families, who need a safe, affordable place to live and raise their children.”

ANNUAL OVERSIGHT OF WALL STREET FIRMS: In December, Senator Brown upheld his promise from when he became Committee Chairman in 2021 –to hold an annual hearing with the CEOs of the nation’s largest banks. Once again, CEOs of the largest U.S. banks testified before the Committee, including: 

  • Charles W. Scharf, CEO and President of Wells Fargo & Company
  • Brian Thomas Moynihan, Chairman and CEO of Bank of America
  • Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co.
  • Jane Fraser, CEO of Citigroup
  • Ronald O’Hanley, CEO of State Street
  • Robin Vince, CEO of BNY Mellon
  • David Solomon, CEO of Goldman Sachs
  • James P. Gorman, CEO of Morgan Stanley.

Brown called out the bank CEOs for fighting against common sense capital requirements that will strengthen our financial system and protect the public from risky bets at the biggest banks. Brown also questioned Wells Fargo CEO Charles Scharf about unionizing efforts at Wells Fargo branches and asked if he would stay neutral during the union campaign. Scharf declined to say yes, prompting Brown to say, “I’m sorry you failed to show that real change is afoot at your bank.”

OVERSIGHT OF THE CREDIT REPORTING AGENCIES: In April, Brown held the first ever oversight hearing with the CEOs of the nation’s largest credit reporting agencies, including:

  • Mark W. Begor, CEO of Equifax;
  • Chris A. Cartwright, President and CEO of TransUnion;
  • Brian Cassin, CEO of Experian. 

Brown pressed the credit reporting agencies to ensure that they report accurate information and protect consumer data, citing the 2017 data breach at Equifax, which affected more than 147 million consumers. Brown also urged the CEOs to exclude medical debt from credit reports. Brown explained, “It’s hard enough for Americans to get a foothold in the middle class.  The last thing workers should have to contend with are careless mistakes from companies that have too much power over some of the most important aspects of their lives. It is vital that the reports that your companies issue be accurate, not include medical debts, and that errors be fewer and correctable. I don’t think it’s a lot to ask.”

In September, the CFPB listened to consumers calls for medical debt to be excluded from credit reports, and announced that they would begin a new rulemaking process to exclude medical debt from credit reports. That rule could improve the credit scores of millions of Americans burdened by medical debt.

REINING IN CRYPTO: This year the Committee continued its work to protect consumers from the risks of cryptocurrencies. In February, Brown held a hearing titled “Crypto Crash: Why Financial Safeguards are Needed for Digital Assets.” The hearing examined how time-tested financial safeguards can help protect against the harms and risks of crypto products. Brown called on regulators to step in and use existing financial safeguards to rein in the crypto industry. Later in February regulators warned banks on the liquidity risks presented by cryptocurrencies. The Fed, FDIC, and OCC reminded banks to apply existing risk management principles to certain sources of funding from crypto asset-related entities.

Brown continued his calls for transparency and regulations in crypto later in the year in a letter to Treasury Secretary Janet Yellen, Securities and Exchange Commission Chair Gary Gensler and Commodity Futures Trading Commission Chair Rostin Behnam to strengthen transparency in cryptocurrency markets to protect Americans’ money. In the letter, Brown wrote:

“As they examine crypto tokens, consumers and investors need to be able to assess risks, avoid fraud, and understand conflicts of interest. The vacuum of accurate, investment-useful information, however, has led to the proliferation of outright scams, platforms vulnerable to manipulation by informed insiders, and hacks that drain customer accounts. The damage is staggering: just last year, nearly $10 billion was lost to crypto scams or stolen in hacks…. Ultimately, inadequate disclosures persist because opacity serves sponsors, executives, and other crypto industry insiders. It is far easier to profit when customers are left in the dark. That’s why the crypto companies resist real transparency and try to force Americans to accept the paltry, self-serving disclosures endemic to the industry.” 

PROTECTING OUR NATIONAL SECURITY 

FEND OFF FENTANYL: Chairman Brown and Ranking Member Scott introduced the Fentanyl Eradication and Narcotics Deterrence (FEND) Off Fentanyl Act, a sanctions and anti-money laundering bill, aimed at combatting the country’s fentanyl crisis by targeting the illicit fentanyl supply chain, from the chemical suppliers in China to the cartels that traffic the drugs in from Mexico. By strengthening current law and directing the Treasury Department to target, sanction, and block the financial assets of transnational criminal organizations, the FEND Off Fentanyl Act aims to stop the flow of deadly fentanyl into our communities by choking off the income source of those who traffic in synthetic opioids.

The bill passed out of Committee with unanimous support and has gained over 67 Senate sponsors. 

ROOTING OUT ILLICIT TERRORIST FINANCING: Following the October 7th attack in Israel, Brown vowed that the Committee would examine the financing behind Hamas’s attacks, including whether cryptocurrency was involved, and what additional economic tools we need to stop state sponsors of terrorism, including Iran, from supporting Hamas and other terrorist groups. Brown will continue to work with national security leaders and his colleagues in the Senate to crack down on the funding of terrorism. In 2024, the Committee will also carefully examine proposals to strengthen authorities’ tools over digital assets used in illicit financing.

Later in October, Brown held a hearing called “Combating the Networks of Illicit Finance and Terrorism” and followed up with a classified briefing with the Administration. The hearing examined how Hamas and Iran proxies financed its attack on Israel. 

As Brown said in his opening statement, “we have a unique role to play, working to understand the financing behind Hamas’s attacks, so we can work to cut off funding for terrorism at its source and work to prevent future attacks.”

USING ECONOMIC TOOLS WILL ADVANCE U.S. NATIONAL SECURITY: In May, the Committee held a hearing that examined the Biden Administration’s efforts to counter the economic and national security threats posed by Chinese government. At the hearing, Committee members focused on the need for a mechanism to address the national security implications of certain outbound U.S. investments as well as concerns related to Chinese ownership of U.S. farmland and agricultural businesses. In August, Brown put out a statement on the Biden Administration’s executive order on outbound investments to China:

“American dollars and expertise shouldn’t go toward building up the Chinese government’s military and intelligence capabilities,” said Brown. “As we work to pass the Outbound Investment Transparency Act into law, the Administration must implement this order swiftly to ensure that U.S. corporate investment doesn’t help China develop technology that will be used against us.”

In February, the Committee also held a hearing following the one-year anniversary of Russia’s invasion of Ukraine to discuss using sanctions, export controls, and other economic tools to counter Russian aggression and continue to support Ukraine. 

At the hearing, Brown stated, “In addition to the humanitarian and military assistance the United States and our allies have provided to Ukraine, our response to Putin’s war centered on the significant sanctions and export controls we have imposed to ensure that Russia – not the rest of the world – bears the full costs of Putin’s illegal invasion…. We must use the tools we have to deter or disrupt behavior that undermines U.S. national security.  We need to do that while we strengthen our partnership with countries that share our values for free markets and democracy.  

DEFENDING THE CFPB

After spending years using their high-powered lobbyists to get rid of the agency, this year Wall Street used the courts to try to gut the Consumer Financial Protection Bureau in the case of Consumers Financial Protection Bureau v. Community Financial Services Association of America. Brown, Senate Democrats, and consumer advocates alike came together to stand up for one of the only federal agencies that is designed to protect consumers’ finances, not Wall Street.

“We created the Consumer Financial Protection Bureau to give Americans a fighting chance against big banks, corporations, and predatory lenders. Wall Street and their lobbyists have been trying to kill the agency for 12 years, because the CFPB stands up to Wall Street and corporations and gives workers and consumers a fighting chance. No other agency fights for consumers – or stands up to corporate power – like the CFPB does,” said Brown. “That’s what’s at stake…the Supreme Court must rule in favor of consumers. Anything else would be disastrous for our economy.”

The Committee also held hearings highlighting the CFPB’s importance to servicemembers and veterans, because of the unique financial difficulties they face and their vulnerability to fraud and scams. At a hearing in November Brown stated, “Every year, tens of thousands of servicemembers go to the CFPB seeking assistance or reporting a complaint—and the CFPB goes to bat for them, working to get their money back or fix the problem. You really can’t say you support veterans and military families, while trying to dismantle the CFPB.”

HISTORIC FEDERAL RESERVE NOMINEES

Committee members came together this year to confirm three historic Federal Reserve nominees: The Honorable Philip Nathan Jefferson, of North Carolina, to be Vice Chairman of the Board of Governors of the Federal Reserve System, The Honorable Lisa DeNell Cook, of Michigan, to be a Member of the Board of Governors of the Federal Reserve System for a full term, and The Honorable Adriana Debora Kugler, of Maryland, to be a Member of the Board of Governors of the Federal Reserve System. 

Dr. Jefferson became the second Black man to serve as Vice Chair on the Board of Governors; Dr. Cook became the first Black woman confirmed to a full term on the Board of Governors; and Dr. Kugler became the first Hispanic American to serve on the Board of Governors in the more than a century-long history of the agency. 

Following their Senate confirmation vote, Senator Brown issued the following statement: 

“Today is a great day for the Federal Reserve. We confirmed three historic nominees – including the first Latina in the Fed’s 109-year history – because our economy works best when the people who lead it reflect the vibrant diversity of our country and the people who make it work. Dr. Jefferson, Dr. Cook, and Dr. Kugler are talented economists and dedicated public servants who will bring new perspectives to the Fed – not just the same old Wall Street consensus. The American people will benefit from their expertise and commitment to low prices and a strong labor market for workers.” 

The following are the Committee's priorities for 2024:

LOOKING AHEAD TO 2024: BHUA PRIORITIES

HOUSING: This year, Brown introduced the Stop Predatory Investing Act to stop corporate investors from buying up homes and raising prices for families. The Committee also held hearings on the lack of available and affordable housingin rural, Tribal, suburban, and urban communities, and on proposed legislation to address housing challenges, including several bipartisan proposals. In May, the Committee held a hearing on improving communities’ resilience to natural disasters through the reauthorization of the National Flood Insurance Program. In September, the Committee also held a hearing examining rising property insurance costs and its impact on renters, homeowners, and the housing market. 

The Committee plans to continue its work in 2024 promoting affordable housing, stopping corporations from jacking up housing prices and rents, and protecting homes and communities from increasing disasters, particularly the low- and moderate-income communities most at risk. 

ILLICIT FINANCE: The Committee will continue its work to root out the illicit financing of terrorist organizations like Hamas. It will focus on what economic tools are needed to stop state sponsors of terrorism, including Iran, from supporting terrorist organizations like Hamas. 

CONSUMER PROTECTION AGAINST FRAUD AND SCAMS: This year the Committee continued to protect consumers and savers, particularly focusing on how veterans and servicemembers are often targeted by scammers because of their unique financial difficulties. 

Brown and the Committee will continue to work in a bipartisan manner to protect all investors and consumers from financial fraud and scams. This work includes standing up for the CFPB as Wall Street and special interests groups continue to attack it.

SHADOW BANKING: In December, Brown along with Senators John Kennedy (R-LA), Bob Casey (D-PA), Chris Van Hollen (D-MD), Mike Braun (R-IN), and Roger Wicker (R-MS) reintroduced the Close the Shadow Banking Loophole Act that will prevent Big Tech companies from becoming banks without the same regulatory oversight as all other bank holding companies. This past year, the Committee also challenged non-bank entities such as Venmo, PayPal, and Cash App to disclose how they protect consumers’ money from fraud and scams. 

In the coming year the Committee plans to continue to push for the Close the Shadow Banking Loophole Act and examine how to regulate non-bank financial institutions, or shadow banks, and how they handle consumers’ money and threaten financial stability. 

CRYPTO: At the start of the year, Brown made a call to Congress to regulate the crypto industry and protect consumers. In the wake of Hamas’ attack on Israel, the money laundering and sanctions charges against Binance, and the conviction of FTX founder Sam Bankman-Fried, the Committee will continue to follow through on its pledge to hold the crypto industry accountable for the harm it does to consumers and the threat it poses to national security.

AI AND BIG TECH IN FINANCIAL SERVICES: This year the Committee held its first hearing on the growing role of Artificial Intelligence (AI) in financial services. At this hearing, Brown urged that AI be used to support consumers and savers, not exploit them. Brown also wrote a letter to the CFPB this year urging them to take action to protect consumers from scams and fraud caused by AI. 

In the year ahead, the Committee will remain focused on watching AI’s growth, and ensuring that AI, Big Banks, and Big Tech are supporting consumers, not taking advantage of them. 

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