House Hearing on Oversight of Prudential Regulators

The committee will come to order without objection. The chair is authorized to declare a recess of the committee at any time. This hearing is entitled 'Oversight of the Prudential Regulators.' Without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. Just a few scheduling items to mention at the top: this hearing has a hard stop at 1 p.m. out of a pre-negotiated agreement. The committee photograph will be taken immediately thereafter, so if you can come back and want to participate in the photo, it's a nice moment of bipartisanship. It's also another opportunity for my Republican colleagues that are seeking the gavel next Congress to make sure that I leave, so I expect their attendance will be pretty high. I encourage members to respect the five-minute rule so we can get through questions this morning in an ample way. There's still work to be done for our oversight. Finally, this is potentially the penultimate hearing for this committee; we'll see what the schedule looks like for the next month and a half, but we'll continue to have those conversations. I'll now recognize myself for four minutes for an opening statement. The era of post-financial crisis regulation is over. For the past decade, your agencies have worked to push credit risk out of the banking system, but at the same time, you completely missed the interest rate risk on bank balance sheets. In March of last year, this led to three of the largest bank failures in American history. Your agencies have also worked to stifle the beneficial role that innovation and technology play in our financial system. It's clear our banking regulators under Democratic leadership have been busy fighting the last war. It's clear our banking regulators under Democrat leadership are working in a different way than Hill Democrats are about these subject matters. Your backward-looking approach to regulations harmed our financial system, innovation, and consumers. In contrast, the House overwhelmingly voted to reject your approach and embrace an inevitable technology-based future by passing things like FIT21 to give market regulation to digital assets, which represents the largest rewrite of financial regulation since the passage of Dodd-Frank, with a large bipartisan vote. Two-thirds of the House supported that measure, with 71 Democratic members supporting that legislation. In particular, the most extensive rewrite of financial regulation since Dodd-Frank passed with overwhelming bipartisan support. That would have been an encouragement for agencies to think differently. We need new technology-based solutions that strengthen our financial system, help consumers, and make our regulators more efficient. Instead of working with Congress to identify these solutions, your agencies have proposed a new regulatory onslaught amounting to a sweeping rewrite of the rules governing U.S. financial institutions. Again, I say that you're working in a different way than my colleagues here in the House and the Senate are trying to operate in a bipartisan way. These proposals frequently included inadequate economic analysis, weak justification, and limited public engagement. Your power grabs not only harm consumers and our financial system, but they also erode the credibility of your historically independent agencies, and that independence is important. First, the Biden administration's politicized, partisan regulatory agenda has practically destroyed your agency's credibility with Congress. By skirting congressional oversight and ignoring the will of the people's representatives, you have eroded the trust in your agency's abilities to act independent of politics. Second, your overreaching in rulemaking diminished your credibility with the courts. This is what you've presided over even after the Supreme Court's decision in West Virginia versus the EPA. This administration's regulators are pushing new rules with paltry and sometimes non-existent statutory justifications. Third, the American people have lost trust in our regulators' ability to act in their best interest. This administration's regulators have repeatedly advanced rules that reduce access and increase the cost of the financial products used by everyday Americans. Because of your actions, the political independence and authority of your agencies is in danger of being reduced, whether by Congress, the president, or the courts. I'm sure my colleagues across the aisle may disagree on certain matters here, but I'll run through a set of facts. The OCC has been led by an acting head for all four years of the Biden administration, yet Mr. Hsu, you have gone along with every politicized initiative put forward, and yet the president never put you forward for a nomination even though you have enormous credibility. Though I disagree with your approach and how you've gone along with the other regulators and you not shown independence, you could have gotten confirmed by a Democratic Senate. Vice Chair Barr, your headline proposal, the Basel III Endgame, was rejected by your colleagues in the public. Meanwhile, all three banks that failed last year were under Fed supervision, and you are the Vice Chair for Supervision. Chair Gruenberg, you are in a league of your own. You failed in your leadership of the FDIC, and that will result in a total overhaul of your agency in coming years. No one who sits in your seat can take the type of actions that you've taken and the abuse that you've rendered to your employees. Resigning in January is too little, too late. That's why Republicans introduced a resolution calling for immediate termination. Chairman Harper, thank you for being here. You're welcome. And as I said at the top, the era of post-financial crisis regulation is over. The evidence is clear: this administration's regulators failed to see it, and unfortunately for you all, it's too late to right the ship. I look forward to the next Congress. I yield back. I'll now recognize the ranking member for five minutes.

Thank you very much, Mr. Chairman. Vice Chair Barr, Chair Gruenberg, Chair Harper, and Acting Comptroller Hsu, I want to thank each of you and all of your hardworking government employees for the great work you've done to strengthen our nation's financial system coming out of the pandemic. It is much more difficult to build something strong, as each of you have done, than it is to basically tear something down. I'm concerned about what the next four years will bring. Trump promised the American people that he would bring down inflation and strengthen the economy, but Matt Gaetz, a man investigated by the Department of Justice for sex trafficking and the subject of a lawsuit, not to mention a supposedly scathing Ethics Committee report, is Trump's nominee to lead the Justice Department. While my Republican colleagues have demanded that the FDIC chair resign and release a report late last night about the cultural problems at the agency, they have been eerily silent about Matt Gaetz's candidacy. To be clear, Matt Gaetz is accused of having sex with a 17-year-old girl, taking the 17-year-old girl across state lines for sex, and paying this 17-year-old girl for sex. All of these are crimes. But where are the calls for his nomination to be withdrawn? Let me just say that Chair Gruenberg indicated that he's leaving, but no, that's not enough for you. You said immediately, what do you want him to do, get up out of his seat now and walk out of the door? No one on this committee should be okay with a sex trafficker running the Department of Justice. But I'm not just concerned about the Department of Justice. I'm concerned about our nation's consumers under a new Trump administration. Elon Musk, the co-president, the richest person on planet Earth, has pushed his way into a highly influential government role and now stands to personally make billions more from his access to the levers of government while he guts the government's tools that protect working-class Americans. But I guess if you're rich and you're co-president, you can get away with it. We know what the future holds. Trump and his appointees will seek to gut guardrails that keep Wall Street, mega banks, and crypto in check. They will rubber-stamp bank mergers to allow big banks to get even bigger and give a free pass for banks to charge billions of dollars in new junk fees. And in a Trump administration where there will be no one to hold these big banks accountable, as Project 2025 promises to eliminate the only watchdog that focuses solely on our nation's consumers in the financial marketplace, the Consumer Financial Protection Bureau. Working families have said that the cost of living is too expensive and affordable housing is out of reach, but we know that critical housing programs will be cut and housing costs will skyrocket. Small businesses that barely survived the pandemic will be crushed by Trump's new taxes, while major corporations will pass the increased cost of goods onto the American people. And after the military is deployed to deport millions, prices will climb even higher without workers in agriculture, construction, and other industries that rely on immigrant labor. Implementation of Trump's policies will bring back inflation at the same time he is trying to abolish the one government agency charged with protecting against inflation, the Federal Reserve. This is not what the American people voted for, but I guess Trump and his co-president Elon Musk are all poised to do all of the things basically that Trump has promised. I yield back. I look forward to the next Congress watching from the cheap seats.

I'll now recognize the chairman of the subcommittee on financial institutions, Mr. Barr, for one minute.

Thank you. This year, I led a bipartisan congressional delegation to Basel, Switzerland, to meet with the Basel Committee on Banking Supervision Secretariat General and other BCBS leadership to discuss the United States' implementation of the Basel III Endgame. There, I made a point that there is some utility to cross-border harmonization and regulatory convergence to protect the stability of the global economy. However, that should not be the ultimate goal in implementing Basel III Endgame. The goal needs to be economic growth. The BCBS officials acknowledged that the Vice Chair's original proposal is inconsistent with the capital neutrality of the Basel agreement and gold plates American capital requirements. Gold plating our requirements will not stimulate but stagnate growth by causing less availability and higher cost of credit. The American people sent a message in November: they want their economic prospects lifted, they want economic growth. We must listen to our fellow Americans and implement capital requirements that better the economy. I yield.

I'll now recognize the ranking member of the subcommittee on financial institutions, Dr. Foster, for one minute.

Thank you, Mr. Chairman, and to our prudential regulators for joining us today. First, I want to commend you for everything that you've done strengthening our banking system, protecting consumers, and responding to rapidly changing financial conditions. Your agencies, along with the CFPB, have left our financial system and our economy the envy of the world. From the Biden manufacturing boom to the record stock market valuations to the record low unemployment, we are passing to the next administration the greatest economy the world has ever seen, and don't ever let anyone tell you differently. During the campaign, we were told not to worry, that Project 2025 with its massive tariffs and threats to Fed independence wouldn't really represent the agenda of the incoming administration. But looking at Trump's appointments, we see that these dangerous proposals must be taken seriously. They include limiting the Federal Reserve's role as a lender of last resort, the elimination of CFPB, and threats to career civil servants who have long provided critical nonpartisan expertise to regulatory bodies. My colleagues across the aisle owe it to the American people to quickly make it clear which of these threats we should take seriously so we can have a robust public debate about the real-life consequences that will ensue. Thank you, and I yield back.

Gentlemen, yield back. If I may take a point of personal privilege. When you announce that you're retiring, your staff starts looking for work elsewhere. I've made a point during my service and my 20 years in Congress to have a deep level of appreciation for the staff of this place. It is truly the staff of this institution that makes it work. When members can't talk to each other, their key staffers must be able to talk to each other, and on this committee, they always have. At times when they were not talking, we were still talking. It's nice to have a trusted group of people that you can rely upon for guidance when you're doing well, but most especially when things are a challenge. I want to thank the staff of this committee, on the Democratic side and on the Republican side, for their long-term work for this institution, for their service to our government, and as citizens to make this place better and to make it work. The reason why I bring this up today is because my communications director, Laura Peavey, who's been with me for six years as ranking member and now as chair, is leaving. This is our first week last week on the Hill. Laura, I want to say thank you to you. I've trusted you with my words, both written and spoken. I've sometimes listened, I've sometimes mispronounced things that you've written, and you've made me sound better than I otherwise would. The things that I said that did not make sense or had some syntax problem, that was all me, not Laura. She's been a thoughtful messenger, strategy developer, and a trusted counselor for me, whether it's COVID, CARES, GameStop, the collapse of FTX, the bank failures, debt ceiling negotiations, that weird time where I was Speaker pro tempore. It was an odd time. She's always been a steady hand, even-keeled, thoughtful, always had her head about her, and one of my most trusted advisors. Even when reporters were hounding her when I was Speaker pro tempore, she was still able to get married during that time. I want to thank you, Laura, and David for his forbearance and surviving through that time. The pictures are beautiful of your wedding day, and I'm sorry it was in the midst of all this chaos. Thank you, Laura, for your service, your counsel, and your friendship, and wish you well. Yes, and she is beet red. With that, thank you for your forbearance. We'll now recognize the testimony today of The Honorable Michael Barr, Vice Chair for Supervision of the Board of Governors of the Federal Reserve System; The Honorable Martin Gruenberg, Chairman of the Federal Deposit Insurance Corporation; The Honorable Todd Harper, Chairman of the National Credit Union Administration; and Mr. Michael Hsu, Acting Comptroller of the Currency. We'll now just go right down in that order. Mr. Barr, you are now recognized for five minutes.

We'll now go to Mr. Gruenberg.

Thank you, Mr. Chairman. If I might echo Vice Chairman Barr, as a former congressional staffer in both the House and the Senate, I have a pretty deep appreciation of the contributions staff make and would want to acknowledge the professionalism of the staff on both sides of the aisle of this committee. If I might, Chairman McHenry, Ranking Member Waters, and members of the committee, I'm pleased to appear at today's hearing on the oversight of prudential regulators. The banking industry continued to show resilience in 2024 following the failures of three large regional banks in the spring of last year. Net income remains relatively high, and asset quality metrics remain generally favorable. The industry's overall noncurrent rate remained unchanged from the second to the first quarter of this year at a level well below the pre-pandemic average. That being said, the industry continues to report weakness in several loan portfolios, including commercial real estate and credit cards, as well as deterioration in multifamily loans. The industry's noncurrent CRE and multifamily ratios increased from the first to the second quarter of this year, and the credit card noncurrent rate remained elevated. Noncurrent loan balances continued to increase in the industry's non-owner-occupied CRE loan portfolio, largely driven by commercial office loans. And primarily due to credit card losses, the industry's net charge-off rate remained elevated in the second quarter. In addition, the second quarter of 2024 marked the 10th straight quarter that the banking industry reported unusually high unrealized losses on available-for-sale and held-to-maturity securities since the Federal Reserve began to raise rates in the first quarter of 2022. These are all matters of close supervisory attention. The FDIC's Deposit Insurance Fund balance as of June 30th of this year totaled $129 billion, that's up $7.5 billion from December 31st of last year, and the DIF remains on track to meet its statutory minimum reserve ratio by the legal deadline of June 30th, 2028. The bankruptcy of the non-bank company Synapse has underscored concerns associated with some bank arrangements with third parties to deliver bank deposit products and services. As a result of the inadequate records maintained by Synapse, its non-bank partners, as well as the banks involved, the banks encountered significant difficulties in returning money deposited through Synapse to the consumers and businesses who were the beneficial owners of funds deposited by Synapse in the banks. To prevent similar problems, the FDIC board has proposed a new rule that would strengthen FDIC-insured depository institutions' recordkeeping of consumers' and businesses' funds in certain custodial deposit accounts opened by third parties. Once in place, these new requirements would ensure that these deposit account records are accurate, complete, and timely. While the banking agencies are unlikely to complete their work on the Basel III proposal in the near future, I look forward to the agencies working together to bring Basel III to a conclusion that will strengthen bank capital and bolster financial system resilience and stability in light of our experience during the 2008 global financial crisis, while being responsive to commenters' concerns relating to credit, operational, and market risk. Similarly, it is important for the banking agencies to finalize the proposed rule on long-term debt for large regional banks to mitigate the run risks of concentrations of uninsured deposits that we experienced in the failures of three large regional banks last year. Finally, I want to report on efforts to address the workplace culture issues at the FDIC. This summer, the FDIC board appointed an outside independent transformation monitor to audit our efforts and an outside expert to assist the FDIC in achieving its goals. This fall, the board appointed two highly qualified experts from outside the agency to head two new independent offices that will have responsibility for receiving, investigating, and acting on all allegations of misconduct. A detailed appendix describing our progress is attached to my testimony. Thank you again for the opportunity to testify today. I'll be glad to respond to your questions.

Mr. Chairman, Ranking Member Waters, and members of the committee, thank you for the invitation to discuss the NCUA's recent work. And Mr. Chairman, thank you for excusing me from the last hearing as I underwent double cervical disc replacement surgery. I also fully agree with your remarks. Having worked for this committee for 12 years, the importance of maintaining bipartisanship and conversations across the aisle is something that I've tried to model as the NCUA chairman as well as a board member. Overall, the credit union system remains strong, as demonstrated by its robust aggregate net worth ratio. The agency, however, has identified growing signs of weak loan performance, elevated delinquency rates for credit cards and auto loans, especially used auto loans, and lower earnings across the system. Moreover, nearly one in five federally insured credit unions currently is a CAMELS code 3, 4, or 5 institution. That includes nine troubled complex credit unions with $500 million or more in assets. Together, these complex credit unions with composite CAMELS code 4 and 5 ratings hold nearly $14 billion in assets. To maintain the strength of the system, the NCUA will continue to work closely with these institutions to mitigate problems before they cause losses to the Share Insurance Fund. Another essential part of the NCUA's statutory responsibilities is examining credit unions with less than $10 billion in assets for compliance with consumer financial protection laws and regulations. In 2024, the agency has focused on overdraft programs, fair lending, automobile lending, and Flood Disaster Protection Act compliance. Beginning with the 2024 first quarter call report, the NCUA also required federally insured credit unions with more than $1 billion in assets to separately disclose their income from overdraft and non-sufficient fund fees. In addition to proposing transparency and greater uniformity with banks, which have reported such fees since 2015, these changes allow credit unions to benchmark their overdraft programs against their peers. The NCUA also continues to support the efforts of credit unions that are minority depository institutions through grants, training, annual symposiums, and customized exams. MDIs offer access to safe, fair, and affordable financial products and services to historically under-resourced communities. At the end of the second quarter of 2024, we had identified 490 MDI credit unions, that's more than one in 10 federally insured credit unions. Collectively, these MDIs serve millions of members and held more than $90 billion in assets. Additionally, MDI credit unions tend to be smaller institutions, yet their aggregate financial performance measures, including return on average assets, net worth ratios, and net interest margins, are comparable to and often exceed those of larger credit unions. The future success of MDI credit unions is integral to ensuring that the system lives up to its statutory mission of meeting the credit and savings needs of members, especially those of modest means. In our written testimony, the NCUA has outlined several changes to the Federal Credit Union Act to better enable the agency to protect the system of cooperative credit. Let me focus on one of those issues here. Cybersecurity threats within the financial services industry remain high and highlight the credit union industry's vulnerability to cyber attacks that can debilitate our nation's critical infrastructure if left unchecked. One year after the NCUA's cybersecurity incident rule took effect, the agency has received more than 1,000 reportable cyber incidents. Seven out of 10 of those cyber incidents related to credit union vendors. What's more, credit unions holding approximately 90% of industry assets use key services offered by unregulated third-party service providers, posing potential risks to financial stability. Last November, for example, a single third-party vendor cybersecurity incident disrupted the daily operations of 60 credit unions. This lack of visibility impacts credit union safety and soundness and exposes the Share Insurance Fund to potential losses. Again, the NCUA requests that Congress restore the NCUA's supervisory authority over third-party vendors. In sum, the NCUA will continue to oversee credit union performance and coordinate with other financial institution regulators as appropriate to ensure the overall resiliency of our nation's financial services system and the broader economy going forward. Congress can enhance these efforts by adopting the legislative changes we've recommended. Thank you. I look forward to your questions.

Chairman McHenry, Ranking Member Waters, members of the committee, I'm pleased to appear today to discuss the activities of the OCC. My written testimony provides an update on the condition of the banking system and other matters. I would like to use this time to reflect on the last three and a half years. Banking rests on trust. Trust enables growth and opportunity for individuals and communities and allows the economic pie to grow. Bank regulators serve as guardians of that trust. When I became Acting Comptroller in 2021, I identified four priorities for the OCC, each anchored in fostering trust in banking. The first priority was guarding against complacency. In 2021, the economic outlook was surprisingly positive given the COVID pandemic. Coordinated actions by the government and banks had been effective in preventing economic collapse. Credit performance was historically strong, businesses were growing, and innovation was taking off, especially in crypto and amongst fintechs. Those conditions felt familiar and ripe for complacency. In response, I prioritized risk management and encouraged bankers and supervisors to be vigilant. That proved prudent. In the following years, crypto lost over $2 trillion in value and many platforms failed. Inflation and interest rates rose rapidly, stressing parts of the banking system, and commercial real estate concerns grabbed market headlines. Throughout this period, OCC-supervised banks stood strong. Customers and counterparties to national banks and federal savings associations were able to have peace of mind despite the volatility and uncertainty. That was not luck; it was due in part to our persistent emphasis on strong risk management and guarding against complacency. The second priority was elevating fairness. Since 2021, the OCC has strengthened and modernized the CRA, reformed overdraft practices, updated our fair lending screens and examinations, and expanded financial inclusion through Project REACh. This past year, we increased our focus on consumer financial health, in particular on its measurement, building on the idea that what gets measured gets managed. The OCC published a report in June that defined financial health and identified three potential vital signs metrics that can be used to gauge the financial health of individuals in real time. Our work with consumer advocates, research organizations, and banks will further develop and test these ideas. The third priority was adapting to digitalization. Banking services are no longer provided by just banks. The digitalization of banking has allowed non-bank fintechs and big techs to offer payment, lending, and deposit-taking services to their users. While this evolution has fostered greater competition and innovation in digital banking, it has also confused consumers, diffused accountability, and created an unlevel playing field. Since 2021, the OCC has been highlighting these challenges and working to address them. Last year, the federal banking agencies issued interagency guidance on third-party risk management. This past July, we issued a focused RFI on bank-fintech arrangements and effective risk management practices. We're currently considering the feedback received. I am a strong supporter of responsible innovation, guided by the maxim: the better a car's brakes, the faster you can drive it safely. In February, the OCC hosted a symposium on the tokenization of real-world assets and liabilities. It focused on how to build the proper legal and risk management foundations for faster, cheaper, and lower-risk settlement. The fourth priority was managing climate-related financial risks. The OCC has taken a deliberative, safe-and-soundness-focused, common-sense approach to climate-related financial risks, focusing on large banks with over $100 billion in assets. In addition to these priorities, fostering trust requires balanced and active outreach to all stakeholders. I've prioritized meeting with community banks, hosting regular gatherings with community advocates and civil rights groups, engaging academics, and visiting local communities across the country, from Midland, Texas to Poison, Montana. Directly engaging a wide range of stakeholders, meeting them in their communities, and actively listening has helped keep me and the agency grounded in what we do and how we approach issues. Most importantly, it helps to foster trust. Finally, I too want to recognize the staff of the OCC, who are true unsung heroes. Their work is invisible to most Americans, yet their impact is huge. I'm proud to have been part of this agency and to have joined such dedicated public servants in a mission focused on ensuring the safety, soundness, and fairness of the federal banking system. I know OCC employees will remain committed to the agency's mission in ensuring that the federal banking system remains a source of strength to the U.S. economy. Thank you.

Thank you for your testimony. I'll now recognize myself for five minutes. Vice Chair Barr, yesterday the law firm of Lane & Watkins released an analysis of your September 10th Brookings speech outlining your proposed changes to the Basel III Endgame proposal. The analysis suggested that of the 75 material, substantive issues raised by the public comments, 24% were addressed by the Barr speech. By contrast, 76% of the material, substantive issues were not addressed. I assume you saw this in your prep for this hearing. You commented previously that any change to the Basel III Endgame proposal would be 'broad-based and material.' Do you believe that your changes to the proposal will impact less than a quarter of the issues, or are they broad-based and material?

Would you identify the individuals and groups with whom you've consulted and how you went about revising the current proposal?

Chair Gruenberg, since May, the committee has requested your presence to discuss the FDIC's toxic workplace. We've attempted to accommodate your requests, yet you've failed to appear even behind closed doors for a transcribed interview. Has the FDIC approved your indemnification request?

Mr. Chairman, I haven't made any indemnification request.

Okay. Will you appear on December 9th as you previously agreed?

We have engaged on that, and that was the date we've identified.

That is not an answer to my question. Is it your intention to appear on December 9th?

Yes.

Have you hired personal counsel, or will you be represented by agency counsel?

I believe agency counsel, Mr. Chairman.

So why did it take more than a month for you to figure out your representation?

I think the legal division was trying to sort out that issue and came to the conclusion that agency counsel would be appropriate.

Okay, but it took a month to do that? That's my understanding. Our first request was in May, and you've stonewalled us because it's an election year and you were hoping to get through. But I noticed you've said that you're going to quit the day before the incoming president is likely to fire you, and we're supposed to have this as a welcome set of news. I welcome it, but you should not be heading the agency. How many rulemakings have you proposed or finalized since you announced your resignation in May?

I'd have to go back and check the record specifically. I can check to be sure, Mr. Chairman.

With all these changes in the administration coming, the expectation from Congress is that all of you will adhere to the Federal Records Act. I'd ask the whole panel here: will you commit to abide by the Federal Records Act and preserve all your records and documents to assist and support the incoming administration? Mr. Barr?

We always do as well. Yes.

Yes.

Yes.

Okay, thank you. With that, I'll now recognize the ranking member for five minutes.

Thank you so much. Vice Chair Barr, given the circumstances, I feel compelled to ask you the same question I asked Chair Powell in July 2019 when he was sitting in the same chair as you are. That is, I asked the Fed Chair if Trump or his co-president called and said 'You're fired, pack up, it's time to go,' what he would do. Chair Powell's response to this question was, 'My answer would be no. The law clearly gives me a four-year term, and I fully intend to serve it.' Chair Powell recently reaffirmed this. So how about you, Vice Chair Barr? Would you pack up and go if Trump or Elon Musk call to fire you?

Thank you. The independence of our agency, like the Federal Reserve, has been critical to supporting the stability of our economy for more than a century. So I hope my colleagues on both sides of the aisle will join me in supporting you and Chair Powell to defend that independence. The Fed has a responsibility known as the dual mandate, for you, Chair Barr, to promote stable prices and full employment. The Fed has spent the last couple of years doing just that and helping protect the United States from a global inflationary period and bringing inflation back to your target of 2%. However, experts have warned that policies of the new administration are expected to cause inflation to skyrocket. Setting aside the merits of different policy choices, it is important for Congress to understand the economics different options may cause. To that end, deporting millions of people and imposing across-the-board taxes on imported goods through tariffs is likely to have an inflationary outcome.

Thank you, Chair Powell. I'm sorry, Chair Powell. I want to say earlier this year, he said that the United States is on an unsustainable fiscal path. In 2017, we were told that Trump's tax cuts for corporations and billionaires like Elon Musk would pay for themselves, but that of course did not happen. The nonpartisan Congressional Budget Office estimated that if Congress extends these tax cuts, it would add 4.6 trillion over the next decade to our deficit. Would that make our fiscal path even more unsustainable?

Do you have an opinion about what would happen if millions of individuals would be deported and what that would do to businesses in this country? Would that cause inflation?

Thank you very much. I yield back. The chair will now recognize the vice chair of the full committee, the gentleman from Arkansas, Mr. Hill.

Thank you, Mr. Chairman. Let me also thank you and the ranking member for your work together in leading the committee in this Congress. We're all grateful for your leadership and the constructive relationship you have with the ranking member. Chairman Gruenberg, you told the chairman that you'd announced your intention to resign some six months ago, principally because of a failed culture at the FDIC of sexual harassment, misconduct, and retaliation at the agency. So why are you waiting another two months to step down? You have a fiduciary responsibility to good governance at the FDIC that, in my judgment, supersedes your political responsibility. And here, with a clear win by President Trump and the executive branch changing hands in January, it makes even more sense that you resigned before that time. Why are you waiting?

Congressman, I indicated previously that I would step down when there was a confirmation of a successor. But that was an impractical suggestion because that wasn't going to happen in an election year, and Mr. Schumer can't magically make that happen.

Perhaps who was nominated to take your place? So let's get to the facts. Why do you wait? Why don't you make December 9th, if you're going to appear before this committee, why don't you make that your resignation date?

Well, as I indicated, I indicated I would step down when a successor was confirmed. It's now pretty clear that's not likely to happen, so I thought it was appropriate for me to step down at the end of the president's term.

I don't think that's acceptable. I think on both sides of the aisle, everybody is disappointed with what's happened at the FDIC under your leadership, and I think you would have served the president, this current President Biden, much better by resigning sooner. And you're now overseeing putting forward regulatory ideas in an administration that's changing, and I don't support those. I appreciate the chairman going down that list. It's why I sent each of you a letter last week calling on you to halt all rulemaking, take actions to suspend the promulgation of any new rules, regulations, including guidance. Agencies should suspend compliance dates even for certain rules. I think you're going to hear from, I think you've already heard from, soon-to-be chairman of the Senate Banking Committee, Tim Scott, as well. Without objection, Mr. Chairman, I'd like to insert that letter into the record.

Without objection.

One such regulation at the FDIC is the broker deposits proposal, which you will be receiving a letter from committee Republicans shortly. In our view, it's inappropriate for a resigning chairman like you to attempt to force through a controversial rulemaking before you leave, especially one that doesn't have the support of the full FDIC board of directors. As a matter of fact, the Biden-Harris administration should abandon plans to proceed, not only on this broker deposit rule that you're considering, but all the current pending rulemakings, including Vice Chair Barr's Basel 3 endgame, the proposed amendments to change in bank control regulations, the CFPB larger participants rulemaking, the PCAOB's no clear proposal, and the SEC's Reg ATS. The people of the country have elected President Trump. They want change. We're going to have change in the independent agencies and the executive branch. So we don't want to spend the last few weeks of the Biden administration fighting over bad policy ideas. Under the Obama and Biden administrations, we instead saw the government was weaponized. This committee on both sides of the aisle has talked about Operation Chokepoint. We talked about people's individual rights on firearms and firearm-related businesses. In your previous tour with the Obama administration and in this administration, we've had conversation after conversation about digital assets being debanked by the Biden-Harris administration. So much so that even Ranking Member Waters said the following on Operation Chokepoint: 'I don't believe an American citizen should have their bank accounts closed down and nobody tells them why, or you have nowhere to appeal.' So I know we can work with Republicans on something like that, and I agree. No one thinks this is fair, and I hope, Madam Ranking Member, we can work on that. Mr. Gruenberg, do you agree with what Ranking Member Waters said?

I certainly, well, short answer is yes. And I would say for anytime an account is closed, we have a policy at the FDIC of notifying the institution and providing an explanation in writing as to why that's occurred, as well as the legal basis for the action.

Do you have any evidence that FDIC examiners have attempted to use verbal direction to banks about digital asset debanking to avoid the Freedom of Information Act?

Congressman, not that I'm aware of.

The gentleman yields back. The chair will now recognize the gentlewoman from New York, Dr. Velasquez, for five minutes.

Thank you, Mr. Chairman. Chair Gruenberg, last year the FDIC closed a deal with Community Preservation Corporation for CPC to service Signature Bank's rent-stabilized loan portfolio. Under the deal, CPC acquired a 5% equity stake in two entities, while the FDIC retained a 95% stake. Combined, the two new entities contain 868 loans valued at approximately 5.8 billion and are secured by 35,000 rent-stabilized multifamily units, many of which are in my district. How is the FDIC continuing to work with the CPC to ensure proper servicing and performance of these loans, while also ensuring these units remain rent-stabilized, as the FDIC is required to do under the statute?

Congresswoman, that's a very significant responsibility that the FDIC inherited as a result of the failure of Signature Bank. We worked closely with the city and state officials, as well as local community organizations, in dealing with the large portfolio of multifamily housing that we inherited. In particular, we identified the multifamily properties that were perhaps at most risk and engaged, as you suggest, with the Community Preservation Corporation for the management of those properties. We reached an agreement with them. We retain a substantial interest. We monitor the management of those properties on a regular basis, and we have a long-term stake in ensuring those properties are maintained for the people, for the residents who live in them.

Thank you. And Chair Gruenberg, last week CFPB Director Chopra submitted a statement as part of the FDIC's board of directors meeting, asserting that the status quo on deposit insurance was fundamentally unfair for borrowers at smaller banks. He states how big businesses that are able to put their money in big banks enjoy free deposit insurance, while smaller businesses that deposit their money in small banks don't. He references a recent incident in rural Oklahoma where some depositors were forced to take losses after their small community bank failed due to fraudulent misconduct as an example. Do you agree with Director Chopra's statement? Do you think the limits and structure of deposit insurance is unfair for depositors at smaller institutions?

I think there are changes that can be made that would be helpful in that regard. As you may know, the FDIC did a report last year on options for deposit insurance reform. The option we thought was most viable, and I believe Director Chopra identified in his statement, was to look at business payment accounts, which are highly valued both by banks and by small businesses operationally, to allow for the payment of employees.

Well, let me just say that I agree a lot with Director Chopra. As a member of this committee and both chair and ranking member on the Small Business Committee, I have seen how big, well-connected businesses can easily deposit their money into the large and well-connected banks. And when these banks get into trouble or fail, insured and uninsured depositors are often protected. But for the small businesses in the rural and underserved parts of our country who deposited their money with small banks like First National Bank of Lindsay, they are left behind because the failure of their bank wouldn't be characterized as having a systemic impact. The current system gives an unfair and competitive advantage to the larger banks in the country and the depositors who deposit with them. Of all the things a small business should have to worry about, the failure of their bank should be one of them. And I hope this is an issue that this committee can tackle in the future. Vice Chair Barr, in September you announced that there will be a re-proposal of the Basel 3 endgame rule. A recent post-FOMC press conference, Chair Powell indicated that there could be a conclusion to this rulemaking sometime in the first half of next year. Do you think this is a realistic timeframe? Do you think we will see a final rule by then?

put out a request for information or RFI on deposits at the same time as it made a proposed rule on broker deposits. It's clear that the FDIC will not have time to digest the public's input from the RFI before trying to move ahead with a broker deposit rule. Chairman Gruenberg, are you not opening the FDIC up on multiple fronts to the Administrative Procedure Act challenge?

Congressman, we've been quite deliberate in putting forward both of the proposals he mentioned. The request for information on deposits is really a follow-on from last year's regional bank failures, where uninsured deposits were really the core risk of precipitating those failures. Enhanced understanding of bank exposure to uninsured deposits is really the object of that request for information. The broker deposit proposal, and I would emphasize it's a proposal still for comment, is really designed to provide simply greater transparency on bank reliance on broker deposits, which studies the FDIC has undertaken previously indicate can cause liquidity and risk factors for institutions. So they're two separate efforts; we think they both have value.

Do you believe by January 19th, your stated date of resignation, that you will be able to digest the public's input on these two proposals?

We're receiving comment on both. As I indicated, the request for information is simply feedback we're seeking from the industry, and on the broker deposit rule, we don't anticipate... yes, but that feedback is relevant.

So do you think you'll actually be able to digest it before your resignation on January 19th?

I think we will have that information before there's final action on the broker deposit.

And are you going to try to take final action before you resign?

As I indicated, that's out for comment. We don't anticipate acting on it prior to the end of the president's term.

In recent months, the FDIC has been requiring asset management firms to enter into new passivity agreements with the agency or potentially be found in non-compliance, despite the comment period of the proposed rulemaking still being open. Please explain exactly how you are coordinating both the NPR and staff letters with your colleague sitting next to you.

Well, we put out a notice of proposed rulemaking that deals with a rule that FDIC currently has in place that constrains our ability to require notice if an investment company gets a controlling interest in a bank. The only thing this proposed rulemaking would do is restore the FDIC's discretion if an investor takes a controlling interest in a bank we supervise, to require notice of that. We have sent letters to a couple of asset managers separately, seeking an understanding of how their investments, controlling investments in FDIC-insured banks for which we're the primary supervisor, is exercised.

Vice Chair Barr and Acting Controller Hsu, do you believe that the FDIC should be doing more? Yes or no?

You feel adequately informed?

You feel like you have adequately been informed through this process?

The gentleman from Texas, Mr. Green, is recognized for five minutes.

Thank you, Mr. Chairman. I thank the witnesses for appearing. I especially thank the ranking member for her commentary. With reference to the independence of the Fed, which is exceedingly important, let me remind us that we are currently being moved forward to be ruled by the plutocracy. The plutocracy consists of those who are very wealthy. They are the people that the millionaires look up to. The millionaires look toward the plutocrats for advice and consent. The plutocracy, to be efficacious, has to have power. It would do something as simple as avoiding advice and consent when persons are being nominated by the president for cabinet positions. Eliminating advice and consent would be antithetical to the Constitution. Plutocrats would do this, very wealthy conservative plutocrats, I might add. But I'm also afraid of what they are going to do, or attempt to do, with the Fed. Plutocrats would like to take charge of the Fed and require the Fed to respond to policies that would emanate from the plutocracy, as opposed to policies that would benefit our democracy. So, Mr. Vice Chair, you are going to have a tough, tough time in your current position. But I must tell you, one of your seven members, Miss Adriana Kugler, I'm very proud of what she did just recently. She stood up for the independence of the Fed. She has indicated the necessity for a Fed that embraces the notion that monetary policy should not be controlled by the politicians in the country. She didn't say those exact words, but that's its import. So, Mr. Vice Chair, I do ask you, are you prepared to take a stand against a plutocrat who is the co-president by virtue of having some 300-plus billion dollars in his coffers? It seems that money makes a difference when the plutocrats are in charge. So I have to ask you, are you prepared to take a stand against the plutocrats and stand up for democracy over plutocracy?

Pardon me for being rude, but the question is not whether we will have a policy, but whether you will stand up for that policy. Are you going to take a stand against Mr. Musk, the co-president, and the president-elect when they demand that their policies be implemented as opposed to the Fed policies?

Are you in agreement with the proposition that the independence of the Fed is something that is global in its scope in terms of its impact? If the Fed no longer has the independence that it has today and should have, do you agree that it will impact not only the United States but the global economic order if the Fed of the United States of America becomes controlled by the plutocrats?

Well, I thank you, and I encourage all of you, while your tenure may be short, may be brief, be strong. Do not allow the plutocrats to bully you. It's one thing to have a bully pulpit and another thing to have a bully with the pulpit. I yield back.

The gentleman from Oklahoma, Mr. Lucas, is now recognized for five minutes.

Thank you, Mr. Chairman. Chairman Gruenberg, this week I sent you a letter with other members of this committee regarding concerns I've heard about the FDIC's corporate governance proposal. The guidelines would be a significant departure from existing practices and clearly will need substantial revision. With your impending resignation and as we move into a new administration, is it your intention to pause on any further rulemaking actions, or on both this or any other major rulemakings?

Congressman, as I indicated, that is a pending rulemaking that was out for comment, and we don't anticipate it being in a position to be acted on before the end of the president's term.

Thank you very much. That's a very wise observation. Vice Chairman Barr, we've had the opportunity to discuss my concerns about the Fed's capital proposals on several occasions. As proposed, Basel III endgame would disincentivize US bank participation in cleared markets at the same time that the SEC's Treasury clearing rule is coming into effect. In your speech from September, you said that the issues for client-cleared derivatives would be fixed, and it sounds like you're willing to work through these proposals next year. Is that correct?

I hope you're willing to take a holistic approach that considers related issues such as stress testing, cross-product netting, and the availability of liquidity during times of market stress. But continuing with you, Vice Chairman, on a related issue, as you know, I'm sensitive to the impacts of the cost of over-the-counter derivatives for end users. I know you've received feedback about the increase in capital charges for the types of uncleared derivatives that are used to hedge commodity prices and interest rates. As you continue to work through the process, will you also address the concerns from the end-user community about how the market risk components will drive up their price of hedging?

Thank you, Vice Chairman. I appreciate that. This is an issue I've focused on for a very long time, and these are tools that help businesses deliver affordable energy and affordable food and fiber that folks back home depend on. It's just too important to get it wrong. And with those brief questions and observations, Mr. Chairman, and using my time very frugally, I'll yield back.

The gentleman from Missouri, Mr. Cleaver, is now recognized for five minutes.

Thank you, Mr. Chairman. Chairman Harper, thank you, and thank all of the witnesses today for being here. I have become increasingly concerned about credit unions, or at least one credit union in particular. As mentioned in your testimony last month, the Department of Justice announced its first-ever redlining resolution involving a credit union. It was Cadale Credit Union, which has over 250,000 members. My concern is Navy Federal, the nation's largest credit union. In fact, it's larger than many of the big banks. They have 13.2 million members and $12-something billion in assets. It has been clear in terms of investigations that they have discriminated through redlining, and that was a statement from our Justice Department. They have, with great intentionality, refused to serve its Black and Hispanic neighborhoods, and they are doing so seemingly with some protection, I'm assuming. But here's the problem that I'm concerned about, not just the discrimination. I think the discrimination is obvious; every report shows that they did, in fact, discriminate against Black and brown citizens. But they are getting away with it. One of the things I'm concerned about is they are not involved with a CRA, and maybe they ought to be subject to the same requirements as the banks, of which they are in many cases larger. What say you?

First of all, let me say that I appreciate and share your concern about having a financial system that works for all Americans, regardless of the color of their skin, ethnicity, orientation, disability, regardless. Second of all, with respect to the size of Navy Federal Credit Union, if you looked at the size of institutions, it would be the 25th largest institution in this country. Currently, Congress has exempted federal credit unions from the Community Reinvestment Act. Overall, there are a number of states that have adopted rules recently, including those in Illinois and New York, to apply it there. There are four other states that also have CRA that applies to credit unions. If Congress were to move forward on CRA and applying it to credit unions, I would ask for flexibility given that there are many different types of federal credit union charters.

I'm talking about the largest credit unions. I mean, there should be some cutoff point. This is a thorny issue and it places all of us in a bit of a pickle, but the larger credit unions like Navy Federal should have to be required to participate in CRA. That's what I'm saying.

Understood. And that's ultimately a decision that Congress needs to make. I can't make that as a regulator. But what we can do within our existing authorities is to apply fair lending laws and examine for fair lending laws. In recent years, we've increased the amount of resources dedicated to fair lending to conduct more exams at larger financial institutions.

Do you know of any policies that have impacted the conduct of Navy Federal? I'm sorry, I'm not understanding. Nothing has happened. I mean, they discriminated. The records are clear as pure, undal discrimination. Am I telling... so the CFPB is in charge of supervision for institutions above $1 billion in size. We have joined the CFPB in its examination of these matters. It's a supervisory matter currently under review. I'm unable to comment on it.

The gentleman from Missouri, Mr. Luetkemeyer, is recognized for five minutes.

Thank you, Mr. Chairman. One of the things I think is a common theme today, as you've seen, is the concern about regulations. I think this last election was about regulations. People are mad as the dickens about the constant oversight and intrusion into their life and the cost of the rules and regulations that come out of Washington. This administration, by their own figures, has propagated $1.8 trillion now in this fiscal year. $1.8 trillion is a huge tax increase, and you gentlemen are part of the problem, as my colleagues have talked about this morning. So, as I'm retiring at the end of the year here, I was going through some of my old files and pitching stuff out, and I see some of the issues we worked on over the years: Operation Choke Point, CFPB enforcement, guidance. Every single one of those is about regulation, overregulation, that we fought like the dickens to stop the nonsense of you guys' different entities here. So my question is, since you've had this mandate now and this wake-up call as of a week or two ago, have you started thinking about stopping the onslaught of rules and regulations? Have you thought about going back and reviewing and trying to pull back on some of the rules and regulations? Mr. Barr, have you started thinking about that at all?

Mr. Gruenberg?

Congressman, it may be worth mentioning that there's a current law in place that you may be familiar with. The acronym is GRIA. It basically requires the bank regulatory agencies on a periodic basis to go back and review all of the rulemakings they've done, and the agencies have begun that process and will be working on it.

So you have begun the process of reviewing and seeing if you can pull back some of those rules and regulations?

That's a process of review that's going to take place over the next several months.

Okay. And it's supposed to result in an output. Mr. Harper, have you started looking at trying to pull some of this back a little bit?

Certainly. On the CECL rule, we did a regulatory phase-in. We had no ability to change it because of the way the statute was written, but we worked to phase in the regulatory capital requirements to make it easier. I fully agree with my colleague Mr. Gruenberg on the GRIA process. The NCUA is not a party to that process under the law, but we voluntarily commit to the decennial review. In addition to that, we have a three-year rolling review of all of our rules and regs, and we certainly collect comments and, where possible, fix the size, scope.

Have you started looking and trying to pull some of the stuff back? Are you listening to the voters at all? The people, the businesses that are impacted by your rules and regulations?

In all my meetings with bankers, these issues have been raised. I have strongly encouraged them to participate in the GRIA process and to be as specific as possible.

Part of the problem, you know, we had the Silicon Valley guys and all the other banks in here last year or whenever they went down. One of the things that was said was that the banking system before that was very resilient, very sound, well-capitalized, and yet these went down. So it begs the question, why are you adding more rules and regulations when probably the problem was the regulators of the time even admitted it? They didn't do a very good job of oversight. So you're punishing the ones who don't need to be punished because of your own inadequacies, the way I look at it. So it's very frustrating to see that there continues to be this onslaught of rules and regulations that I hope stops right now and you start pulling some of the stuff back. That being said, I saw on Wall Street this morning an article about paper checks' popularity but keeps scammers happy. Our newest problem is we got check fraud running rampant again. Mr. Gruenberg, what do you see happening on it? What are you trying to do about it? How are you working on the problem?

We hear about that from the bankers as much as any issue. What's old is new again. Check fraud used to be a thing in the past, and it has come back in various forms, some of it in the traditional forms of check fraud, others using technology, check washing, to do it. We've established a hotline for any banker to call that has difficulty. Some banks have difficulty with the corresponding bank getting cooperation; we try to assist them. There's also an interagency group that is trying to focus on this issue. But this is a big concern for a lot of bankers.

Very good. Are you working with the check companies as well to make it more difficult to launder or to fiddle around with the checks and make sure that if you try and do something, all of a sudden the whole check like mission impossible blows up or something? I don't know.

It's a good question. Let me look into that.

Okay, thank you very much. I yield back to the chairman.

Exploding checks. All right, well, I'm trying to think outside the box, Mr. Chairman. I'm trying to get a laugh. It's such a dour session here this morning. The gentleman from Illinois, Dr. Foster, is recognized for five minutes.

Thank you, Chair McHenry. I think that last discussion is a perfect example of why we have to move as quickly as possible to the future with secure financial electronic transactions and secure digital identity behind it, so that this sort of identity fraud through check washing becomes a thing of the past. I was happy to see the CFPB recently finalized the open banking rule on personal financial data rights. I believe this will increase competition in the financial system and give consumers more control over their sensitive financial data. But one area that may benefit from your agency's input relates to the conditions under which a bank can deny a data request from a third party and how liability would be distributed in the event of a data breach in one of those third parties. Vice Chair Barr, has the Federal Reserve been considering these issues?

Do you think in terms of the liability division, is there something that legislation may be needed on that, or do you think all the authorities are in place?

Chair Harper, last November there was a cybersecurity attack that affected more than 60 credit unions in more than 40 states. Would you quickly describe what happened and how this relates to Congress giving the NCUA the same authority that banking regulators already have with third-party vendors of its regulated entities?

Certainly. The lack of vendor authority is a growing regulatory blind spot that the Government Accountability Office, the Financial Stability Oversight Council, as well as the NCUA's Inspector General, have all called on Congress to close. I agree with them on the need. With respect to the particular incident that you outlined, it was not just the vendor but the vendor's vendor that had the attack. We were days behind in being able to actually assist the 60 credit unions that were directly impacted and lost access to their core service provider during that attack. That is an example that affected approximately 100,000 members with a billion dollars in assets. There are some obviously much larger core processors. This is a national security issue.

That's right. I agree completely, and I really hope that's an opportunity to make bipartisan progress on our legislation. I thank you for the legislation you've introduced, but this regulatory gap is dangerous for consumers, obviously, and it's also dangerous for millions of our military service members, the veterans, and the families who use credit unions here and abroad. Yesterday I sent a letter to the House Armed Services Committee raising concerns about exactly those risks. Do you agree that NCUA's lack of vendor authority puts the readiness and the financial stability of our service members at risk?

Yes, there are risks.

Well, thank you. This is an issue we just should have dealt with a while ago. Acting Comptroller Hsu, we have discussed the remarks you made last year suggesting that your authority to oversee third-party vendors of banks may be insufficient and that you may need tools to oversee fourth- and fifth-party vendors, given how the supply chain supporting banks has become much more complex. This was apparent with the collapse of the fintech Synapse earlier this year, when thousands of consumers, including some of my constituents, were frozen out of their bank accounts. So what lessons have you learned from the Synapse bankruptcy, and what steps should we be taking to better protect fintech customers in the future? And again, do you need any legislation on this?

Thank you very much for the question. This is a very important issue given how banking is evolving, especially between banks and non-banks. For the banking agencies, I think using our current authorities, we are able to hold banks to a standard where third-party risk management is done in a way that can ensure safety and soundness. We recently put out an RFI specifically focused on bank-fintech relationships to make sure that healthy arrangements are the ones that are in existence. I do think there is a gap for non-banks in terms of the regulation of non-banks. Most non-bank fintechs are regulated as money services businesses by the states, and that regulation and oversight is highly uneven across the states; it's patchwork across the country. I do believe that a federal standard that levels up that regime would be helpful and would have helped to prevent some of the problems that your constituents are having now.

The gentleman's time has expired. The gentlewoman from Indiana, Mrs. Houchin, is now recognized.

Thank you, Mr. Chairman. Thank you to the witnesses for being here to testify. I'm going to focus my comments today on Chair Gruenberg. Mr. Chairman, I just want to ask you, what in the heck is going on at the FDIC? We had reports last year of misconduct.

We, at my initiative, engaged an independent third party who undertook a detailed review that indeed found serious issues at the agency and made a series of recommendations which we are now in the process of implementing.

Has anyone been fired?

I can tell you that in the last 12 months, there have been 16 disciplinary actions, eight of them involving removal or proposals to remove, and these are at executive and manager levels.

Has anyone been fired?

The answer is yes.

You, as the chairman, have been there overseeing the FDIC for nine of the last 13 years, and it is under your watchful eye that this toxic workplace environment has been allowed to persist, a rampant boys' club culture that has led particularly your female employees to feel unsafe, dismissed, and unheard. Will you now today take responsibility for that?

I have done that previously and committed to implement all the recommendations of the third-party report.

But you understand the frustration that the American people may have that this has been under your watch, and it is consistent with President Biden's actions of not really firing anybody that is doing a terrible job. After the release of the report, you said you intended to resign upon confirmation of your successor. However, this has not occurred, and just yesterday you said you intend to remain in your position until January 19th, the day before Trump's inauguration. Chair Gruenberg, there are significant issues at the FDIC that are highlighted in the report. You've stated your intention to resign. Why do you believe it's appropriate to continue to proceed, particularly with these, not to mention all of the politically motivated rules that you're trying to implement and these major rule changes, when you cannot address and haven't addressed in nine of the last 13 years major workplace culture problems within your agency?

Congresswoman, as I indicated earlier, I previously said I would step down when a successor was confirmed. When it became clear that that's unlikely to happen, I indicated that I would step down at the end of the president's term.

The report also suggests that your employees don't feel they're taken seriously, and you being here today, I can see why. You refusing to resign and step aside and allow someone else to take over and try to fix the problems that occurred under your watch, how can you justify that when it appears that the workforce lacks trust in your leadership?