Today, the House Financial Services Committee, led by Chairman Patrick McHenry, is conducting a hearing to oversee President Biden's prudential banking regulators. The session focuses on holding Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg accountable for allegedly obstructing Congressional oversight. This comes amid a staff report alleging a toxic workplace culture at the FDIC under his leadership. Additionally, members will scrutinize other regulatory initiatives from President Biden’s federal banking regulators, including the Basel III Endgame proposal.
Chairman McHenry opened the hearing with remarks emphasizing a shift in regulatory focus. He stated, "The era of post-financial crisis regulation is over." He criticized agencies for missing interest rate risks on bank balance sheets, which he claims led to significant bank failures last year. McHenry argued that regulators have stifled innovation and technology in the financial system.
McHenry highlighted the House's passage of FIT21, a digital asset market structure bill he described as "the largest rewrite of financial regulatory law since Dodd-Frank," noting its bipartisan support. He expressed concern over what he termed as "a regulatory onslaught" by agencies proposing sweeping changes without adequate analysis or public engagement.
He accused the Biden Administration's agenda of eroding agency credibility with Congress and diminishing trust among American people and courts. He referenced ongoing issues such as the acting head leadership at the Office of the Comptroller of the Currency (OCC) and criticized Vice Chair Barr's Basel III Endgame proposal.
Addressing FDIC Chairman Gruenberg directly, McHenry said his leadership would lead to an overhaul of the agency and called for his immediate resignation through a Republican-introduced resolution.
In closing, McHenry reiterated his stance that current administration regulators failed to adapt to changing times: "As I said, the era of post-financial crisis regulation is over."