'Was There Anything You Got Wrong?': Lisa Blunt Rochester Grills Top Trump SEC Nominee Paul Atkins

2 days ago

At Thursday's Senate Banking Committee hearing, Sen. Lisa Blunt Rochester (D-DE) questioned SEC nominee Paul Atkins.

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Transcript

00:00Thank you, Mr. Chairman and Ranking Member Warren.

00:03I want to start off by saying that for the nominees that are before us,

00:11your responsibilities are pivotal, not just for our country, but for the world.

00:17And I feel it's unfortunate that you did not each get the requisite time that was commensurate

00:26with how important your positions are.

00:30I will ask you some questions for the record so that you are not all left out.

00:35But right now, I want to focus my questions on you, Mr. Atkins.

00:41I'm deeply concerned about your record.

00:45And even in the course of this hearing, when asked about why the financial crisis happened,

00:51I have here SEC distractions, I have ancillary issues.

00:57Instead of the question when it was posed to you, was there over-regulation,

01:02you said mis-regulation.

01:04You mentioned Fannie and Freddie.

01:06Was there anything that you got wrong?

01:10Well, Senator, you know, I was one of five commissioners, and obviously I was not in charge.

01:16And, you know, during that time, you know, there were things that I disagreed with,

01:20which I, when I was talking about distractions, I really believe that some of the things

01:27that then-chairman was pushing and that he had a majority on,

01:31I do think that it distracted the staff from focusing on the real problems of over-leveraging

01:37in the securities industry, which, you know, contributed to Bear Stearns issue.

01:44And then the underlying issues of Fannie and Freddie were the securitization

01:49of subprime mortgages and the distortions that that did

01:53to the marketplace were really critical.

01:55And we found we and with the congressional oversight panel.

01:58But was there anything that you got wrong?

02:01When you look back, is there something you would have done differently?

02:06Well, I think as far as looking at, you know, the over-leveraging and what the staff did

02:14or did not get due, and I think that that's one thing that I believe SEC, you know,

02:21should have been, you know, more on top of.

02:24Did you vote for the consolidated supervised entity program?

02:29I did.

02:30It was a unanimous vote by the commission, but I did ask the crucial question,

02:34do you the staff have enough resources to effectively take on that burden?

02:40And I was assured by the staff and the chairman, yes.

02:44And I think that was part of the problem.

02:46I think looking back, we know that this allowed the five large investment banks

02:51to extremely leverage positions in mortgage-backed securities that ultimately failed

02:56and bankrupted or seriously destabilized those firms.

03:00And the SEC's inspector general determined that this program and the poor oversight

03:05of these banks by the SEC contributed to the crisis.

03:10And as Senator Warnock said, we saw people lose their homes,

03:15people lose their jobs, and their retirement savings.

03:18I hope that we will learn some lessons.

03:21Right now, the administration isn't really waiting to deregulate.

03:25It's kind of dismantling day-by-day operations.

03:29It's my understanding that the SEC has shuttered regional offices,

03:34including the Philadelphia office that serves Delaware, and offered buyouts,

03:39maybe $50,000 for people to resign or retire.

03:43Do you agree with shuttering these regional offices?

03:47Well, Senator, it's been now 15 years since I was at the agency,

03:51so I don't really know what the management is like or what the efficiency is

03:57or how best to make sure that we're using taxpayer money.

04:01Did you think they were overstaffed when you were there?

04:05Well, I don't really remember.

04:08Again, the commissioners don't have influence, really,

04:11over the HR part of the agency.

04:14So as chairman, coming in, that will be on my desk.

04:19I think one of the big concerns is that without the staff,

04:23it's hard to have oversight.

04:26A lot of folks rely on the SEC.

04:32The no action letters, for example.

04:36Businesses that are trying to process an IPO.

04:38And so I think it's going to be vitally important

04:41that there actually be people there that can do the work.

04:44Yeah, they are vital.

04:45Very vital.

04:46Lastly, I would just say, as a person coming from a state

04:51where the financial sector is vitally important,

04:55your jobs are important.

04:58We have six CDFIs in our state.

05:02We have community bank.

05:04And so these banks, these institutions

05:07support small businesses.

05:09They support our communities.

05:12And so I hope that there will still be a strong focus

05:14on them as well.

05:15Thank you, Mr. Chairman, and I yield back.

05:17Thank you, ma'am.

'Was There Anything You Got Wrong?': Lisa Blunt Rochester Grills Top Trump SEC Nominee Paul Atkins

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