The Week Ahead: Regulators Take to Capitol Hill

On Thursday, May 16, the Senate Banking Committee will be hosting a hearing titled, “Oversight of U.S. Financial Regulators: Accountability and Financial Stability” at 9:00 a.m. Central.

Taking the stage will be the heads of the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

Regulators take the stand

The Federal Reserve System is the central bank of the United States. It performs five key functions to promote the effective operation of the U.S. economy and the public interest by:

  • Conducting the nation’s monetary policy to promote maximum employment and stable prices in the U.S. economy;
  • Promoting the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad;
  • Promoting the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole;
  • Fostering payment and settlement system safety and efficiency through services to the banking industry and U.S. government that facilitate U.S.-dollar transactions and payments; and
  • Promoting consumer protection and community development through consumer-focused supervision and examination, research, and analysis of emerging consumer issues and trends, community economic development activities, and administration of consumer laws and regulations.

The FDIC was founded to maintain stability and public confidence in the nation’s financial system. An independent agency of the federal government, the FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s.

The FDIC receives no Congressional appropriations, and is funded by premiums that banks and savings associations pay for deposit insurance coverage. The FDIC insures trillions of dollars of deposits in U.S. banks and thrifts, and in support of this goal, the FDIC:

  • Insures deposits;
  • Examines and supervises financial institutions for safety, soundness, and consumer protection;
  • Works to make large and complex financial institutions resolvable, and
  • Manages receiverships.

The OCC is an independent bureau of the U.S. Department of the Treasury that charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks. The OCC ensures that supervised banks operate in a safe manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations.

Witnesses set to testify

Scheduled to represent the Federal Reserve at the hearing will be Michael S. Barr, Vice Chair for Supervision. Barr took office as the Vice Chair for Supervision of the Board of Governors of the Federal Reserve System on July 19, 2022 for a four-year term. He also serves as a member of the Board of Governors for an unexpired term ending January 31, 2032.

Prior to his appointment to the Board, Barr was the Joan and Sanford Weill Dean of the Gerald R. Ford School of Public Policy, the Frank Murphy Collegiate Professor of Public Policy, the Roy F. and Jean Humphrey Proffitt Professor of Law at the University of Michigan Law School, and the Founder and Faculty Director of the University of Michigan’s Center on Finance, Law & Policy. At the University of Michigan Law School, Barr taught financial regulation and international finance and co-founded the International Transactions Clinic and the Detroit Neighborhood Entrepreneurs Project.

Barr served as the U.S. Department of the Treasury’s assistant secretary for financial institutions, 2009-2010. Under President William J. Clinton, he served as the Treasury Secretary’s Special Assistant, as Deputy Assistant Secretary of the Treasury, as Special Advisor to the President, and as a Special Advisor and Counselor on the Policy Planning staff at the U.S. Department of State. Additionally, Barr served as a Law Clerk to U.S. Supreme Court Justice David H. Souter during October Term 1993, and previously to the Honorable Pierre N. Leval, then of the Southern District of New York.

Martin J. Gruenberg was sworn in as Chair of the FDIC Board of Directors on January 5, 2023, and will be testifying on behalf of the FDIC. He has been a member of the FDIC Board since August 2005, and previously, served as Vice Chair from August 2005 to July 2011, and as Chair from November 2012 to mid-2018. Gruenberg has also served as Acting Chair on a number of occasions.

Gruenberg joined the FDIC Board after broad congressional experience in the financial services and regulatory areas. He served as Senior Counsel to Senator Paul S. Sarbanes (MD) on the staff of the Senate Committee on Banking, Housing, and Urban Affairs from 1993-2005. He also served as Staff Director of the Banking Committee’s Subcommittee on International Finance and Monetary Policy from 1987-1992.

He served as Chair of the Executive Council and President of the International Association of Deposit Insurers (IADI) from November 2007-November 2012. In addition, Gruenberg served as Chair of the Federal Financial Institutions Examination Council (FFIEC) from April 2017-June 2018. Since June 2019, Gruenberg has served as Chair of the Board of Directors of the Neighborhood Reinvestment Corporation (NeighborWorks America), and he has been a member of the Board since April 2018.

Michael J. Hsu became Acting Comptroller of the Currency on May 10, 2021, and will testify on behalf of the OCC. As Acting Comptroller of the Currency, Hsu is the administrator of the federal banking system and CEO of the Office of the OCC. The Comptroller also serves as a Director of the FDIC, and a member of the Financial Stability Oversight Council (FSOC) and the FFIEC. Hsu has served as Chair of the FFIEC since April 1, 2023.

Prior to joining the OCC, Hsu served as an Associate Director in the Division of Supervision and Regulation at the Federal Reserve Board of Governors. In that role, he chaired the Large Institution Supervision Coordinating Committee Operating Committee, which has responsibility for supervising the global systemically important banking companies operating in the U.S. His career also has included serving as a Financial Sector Expert at the International Monetary Fund, Financial Economist at the U.S. Department of the Treasury, and Financial Economist at the Securities and Exchange Commission.

Click here for more information or to register for the Senate Banking Committee Hearing “Oversight of U.S. Financial Regulators: Accountability and Financial Stability.”

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Eric C. Peck

Eric C. Peck has 25-plus years’ experience covering the mortgage industry, most recently serving as Editor-in-Chief for National Mortgage Professional Magazine. He graduated from the New York Institute of Technology, where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books, and has served as Copy Editor for
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