'That Is Absolutely Not How This Should Work': Katie Britt Grills Noms About Key Banking Failures

3/28/2025

At Thursday's Senate Banking Committee hearing, Sen. Katie Britt (R-AL) questioned regulatory nominees about banking regulations.

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Transcript

00:00Thank you, Mr. Chairman. Thank you all for your willingness to be here and your willingness

00:04to serve our country at the highest level. You all are up for very critical roles that

00:09affect the lives of all Americans, which is why it's very important that you all bring

00:14transparency and accountability to the agencies that you are going to serve. I'm not going

00:19to ask you all to comment on the past, but I do want to highlight a couple of the needs

00:22of change here. Over the last few years, we've had agencies that prioritized speedy regulation

00:29over thoughtful policymaking, rushing into policymaking without proper due diligence

00:34or justification. In fact, we had regulators sit in this room and our other committee hearing

00:39room in front of us and one by one tell me that they believed the U.S. banking sector

00:44was the strongest and well-capitalized across the world. I agree. However, immediately calling

00:52for higher and more regulation and higher capital standards right after that. I mean,

00:58I literally asked them after the 2023 banking failures, I said, did you use every tool in

01:03your toolbox to prevent this? Every single one of them walked down and said, I don't

01:07know. I don't know. I don't know. I'll get back to you. But then in quick response after

01:11that, they all said they needed more power and more authority to prevent that in the

01:16future. That is absolutely not how this should work and it's completely and totally unacceptable.

01:21One of the things we also must reinstate is proper regulatory tailoring. So I was able

01:27to sit down with Senator Crapo right after these failures and ask him about 2155. My

01:33first question is for you, Mr. Good, former staffer to former staffer. Can you speak to

01:37the purpose of 2155 and how a balanced regulatory framework actually promotes stability and

01:43growth? Because it is my belief, whether it's capital, liquidity, operational risk management,

01:48an Alabama bank with less than a billion dollars in assets should not be subject to the same

01:53threshold as a $3 trillion bank. And I'd probably say the same for $150 billion bank.

01:58And I think there's purposeness in this and I'd like to hear your thoughts.

02:01Well, thank you very much for the question. It is certainly the case that not all banks'

02:06business models look the same or have the same risks. And as a result, they should not

02:10be treated the same way, whether as a matter of regulation or as a matter of supervision.

02:15If we want to preserve a diverse banking sector, which is to say a sector in which we have

02:22banks that are smallest banks, community banks serving their local communities to

02:26the largest of banks and everything in between, Senator, we need to ensure that we, the regulators,

02:31and if confirmed would be the comptroller, adhere to both the letter of the Economic

02:39Growth Act as well as the spirit of it in making sure that we are bringing common sense

02:43tailoring to both bank supervision and bank regulation.

02:47Thank you for that commitment. Also, in the rulemaking that we've seen over the last couple

02:51of years, it created significant confusion and compliance costs to some of our smallest

02:56banks, our community banks and our businesses in rural America and our main streets that

03:01make our state so great. Mr. Pettit, this question is for you. In your role of overseeing

03:06bank policy, will you commit to regular communication with community bank sector to ensure that

03:13the rules that are going to be considered are taking a look at their unique business

03:18model? What is the cumulative impact of these things? What is the actual enforcement mechanism?

03:24What is this going to cost? How is this going to affect them and their relationship banking?

03:28Will you commit to looking at that before moving forward?

03:31Yes, Senator, if confirmed. I've seen firsthand the role that community banks play in adding

03:36to the breadth of our banking system. They reach areas in states like Tennessee and Alabama

03:40that would be otherwise unbanked. So I look forward to working with them, if confirmed.

03:46Thank you, Mr. Pettit. I only have a minute left, and I have two more questions. Shifting

03:50gears, I want to touch on the SEC Consolidated Audit Trail, or CAT. The massive data collection

03:56poses serious security and privacy risk for consumers. I am pleased that the agency has

04:01recently halted the CAT collection of certain personal identifiable information. However,

04:06I still have concerns that the data that's already been collected and stored within CAT

04:10creates a target for bad actors. Mr. Adkins, will you commit to reevaluating

04:15both the necessity of CAT and whether adequate protections are in place to safeguard that

04:21data that has already been collected? Absolutely.

04:24Thank you so much. I look forward to your leadership on that. And Congressman Molinaro,

04:29I see your former colleagues flooding in from the back. You have just immense support from

04:36both sides of the aisle and everyone who's had an opportunity to work with you. I am

04:40excited for your leadership in this new role. When you said we want to help America move

04:44forward, I couldn't agree more. One of the things we see in Alabama is having many rural

04:49communities. Sometimes that takes extra effort and extra thought. Do you have anything you

04:54want to add or talk about with regards to how we incorporate rural communities into

04:58your plans? Sure. Critically important. Obviously, many

05:01of your constituents need to move within their communities but to other communities for employment.

05:06I think the FTA can lean in with technical support, working with regional and smaller

05:10transit agencies to provide back office support, really to grow their capacity. But we look

05:16forward to getting on the ground, working with you, your staff, and local officials

05:20to assist in meeting the needs of rural communities. Thank you so much. Thank you all.

'That Is Absolutely Not How This Should Work': Katie Britt Grills Noms About Key Banking Failures

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