Senator Warren on Michelle Bowman Nomination Vote

Mr. President, I rise today to talk about the nomination of Michelle Bowman to be the Federal Reserve Board's vice chair for supervision. Governor Bowman has served on the Federal Reserve Board since 2018 when she was confirmed as the first governor required to have community bank experience. But during her tenure, she has consistently prioritized Wall Street over Main Street. She has weakened safeguards on the largest banks in the country and has opposed common sense rules to promote financial stability, to protect consumers, and to drive investment in communities across this country. And just yesterday, in another Wall Street giveaway, she voted to lift the asset cap that was placed on Wells Fargo in an effort to rein in Wells's decadesl long track record of customer abuses. She did this despite the fact that there is no public evidence that Welsh Fargo has substantially changed its approach to banking. Now, Governor Bowman's actions have already imposed serious costs on small businesses and families. It would be especially dangerous to put her in charge of further deregulating Wall Street. Now, just as President Trump has pushed the economy to the edge of a cliff, Democrats on the banking committee unanimously opposed her nomination as vice chair for supervision, and I urge all of my colleagues, Democrats and Republicans, to do the same. Now, in the years leading up to the 2008 financial crisis, the Federal Reserve Board effectively abdicated its statutory role as a financial regulator and supervisor. As a result, the agency was asleep at the wheel as dangerous risks built up in the financial system, especially in the subprime mortgage market. When the economy tumbled, families, small businesses, and even community banks suffered the consequences of the Fed's negligence. Congress established the vice chair for supervision position after the 2008 financial crisis in order to ensure that the Fed never again ignored its financial regulation and supervision responsibilities. But in her six years on the Federal Reserve Board, Governor Bowman has hacked away bit by bit at the safeguards put in place after the 2008 financial crisis. So let's take a look at her record. Governor Bowman has weakened critical safeguards for the largest Wall Street banks. She has voted to reduce big banks lossabsorbing capital requirements and she has voted to undermine the stress testing framework both of which have left big banks more vulnerable to collapse. She has also voted to allow big banks to gamble with people's deposits in financial markets including through increased investments in hedge funds and private equity funds. These actions have allowed Wall Street banks to take on riskier bets and juice their dividends, boost their buybacks, and pump up executive compensation, all at the expense of financial stability. Bowman also voted to deregulate massive banks with 100 billion to$250 billion in assets. That particular error in judgment came back to bite our country quickly, causing the second, third, and fourth largest bank failures in US history just a few years later when these three deregulated banks, First Republic Bank, Silicon Valley Bank, and Signature Bank all failed within weeks of each other in 2023. For a while, the entire banking system teetered on the edge of collapse. Now, instead of learning from that near catastrophe, Governor Bowman has refused to take any responsibility for her votes that led to this banking turmoil, and she has opposed common sense rules to strengthen the resilience of large banks even after those failures. Governor Bowman also voted to approve more than 800 bank merger applications, including Morgan Stanley's major acquisition of Erade and Capital 1's recent acquisition of Discover, which created the largest credit card company in America. Her lacks approach to bank mergers undermines competition and increases concentration in the banking sector and that in turn inflicts costs on consumers and threatens the stability of the entire banking system. It also poses a direct risk to the future of community banks in this nation. In addition, Governor Bowman opposed even modest improvements to the Community Reinvestment Act. This is a 50-year-old law that was created to prevent racist lending practices by big banks and to ensure that all communities have access to critical financial services. Last year, she was the only Fed governor, the only one to vote against a rule that would have updated the CRA regulations for the first time in nearly 30 years, and would have increased banks investments in communities of color, in rural and native communities, and in other low and moderate income areas. Now, beyond her deeply troubling policy record, Governor Bowman has also demonstrated a worrisome lack of independence from the White House during her nomination process. For example, at her hearing, she refused to acknowledge any economic uncertainty created by President Trump's tariff policies, and she refused to concede any potential impact of those policies on US financial stability. That refusal puts her at odds with Chair Powell, with the Fed's staff, and with economic experts across the political spectrum. It was clear that Governor Bowman did not want to be seen, even indirectly, criticizing President Trump. Miss Bowman also stated that she plans to submit regulatory actions to the White House for review, which undermines the Fed's independence and all but guarantees a new deregulatory bonanza for these Wall Street banks. She has refused to answer questions about whether she met with then Presidentelect Trump or his transition team while on an official Federal Reserve funded trip to West Palm Beach in November 2024. Look, our economy is in a precarious moment. President Trump's disastrous mismanagement of this economy is raising costs for families. It's putting jobs at risk. and it's threatening to decimate small businesses across this country. Deregulating Wall Street right now would throw gasoline on Trump's economic fire. The last thing that families and small businesses need is another massive financial crash. I urge my colleagues to oppose Michelle Bowman's nomination.