Operational Risk Capital Requirements for Banking Organizations

Floor Speech

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Ms. GABBARD. Mr. Speaker, I thank Ranking Member Waters for her leadership in opposing this bill and standing for the protection of everyday Americans.

We can't forget that it was only 10 years ago that millions of hardworking families watched their life savings entirely wiped out. They lost their homes. They couldn't afford to send their kids to college. And all of this heartache, this pain, this suffering that they went through was the direct result of risky predatory lending practices and too-big-to-fail banks that did not have sufficient capital in place to support and absorb their financial losses.

It was in the aftermath of this financial disaster in 2008 that Congress passed protections to prevent this from happening again, but here we are today where these big banks now believe that we should simply forget the past mistakes that they made and, instead, only evaluate their current activities to determine certain capital requirements. I guarantee you those families that have suffered have not simply forgotten about what they went through and what they are still struggling to overcome and recover from.

By ignoring critical indicators of past activities, this bill would allow big banks, like Wells Fargo, for example, who defrauded the American people just in the last several months by opening millions of fake accounts, to get away with a slap on the wrist. And the American people are set up to take the fall for their actions.

Now, supporters of this bill claim that current capital requirements stifle lending and hurt our banks and the economy, but the facts say otherwise. In 2016, bank profits reached an all-time high, and today business lending is up 75 percent since 2010. Our country's banks added more than $700 billion in capital to absorb potential losses and protect Americans and our economy from financial disaster.

Higher capital requirements don't restrict lending. They simply ensure that big banks that are even bigger today than they were in 2008 can absorb their losses without depending on taxpayers for a bailout.

The American people deserve a financial system that works for them and their families, not one that bets against them to boost Wall Street profits. We need to pass legislation that increases these capital requirements of banks with assets greater than $50 billion and continue to enact and strengthen reforms that will protect our economy and American families from another massive collapse. That is why I am strongly urging our colleagues to reject this dangerous bill and, instead, work together towards efforts to build a financial system that serves the American people, not special interests or Wall Street banks.

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