Executive Session

Floor Speech

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Ms. WARREN. Mr. President, Donald Trump promised during his inaugural address to fight for ``the forgotten men and women of our country,'' but in Donald Trump's Washington, the Senate sits on its hands as the revolving door spins faster and faster. Brian Montgomery is just the latest in a line of bankers, lawyers, investors, and consultants who cashed in on their big-time public service and now want back in.

Mr. Montgomery has just been confirmed to be the Commissioner of the Federal Housing Administration, the FHA, which provides taxpayer-backed insurance that helps millions of Americans buy homes they might not otherwise be able to afford. Lenders make loans to these families because the FHA gives them some protection in case the families default. Like any insurance, there are strict rules about who qualifies. Unless it is managed well, the FHA could expose taxpayers to a risk of billions of dollars in losses.

Mr. Montgomery knows something about the FHA. He was the Commissioner from 2006 to 2009 while the housing market was flying high and when it all came crashing down. Since almost the day he left, he has been making buckets of money selling his knowledge to banks who broke the rules and are trying to escape the consequences.

Here is what I mean. One month after leaving the FHA, Mr. Montgomery founded and became vice chairman of a new company called Collingwood Group which, according to reports, was known in the housing finance industry as a specialist in helping firms navigate FHA-related penalties and lawsuits. Who better to navigate the rules of the FHA than the guy who used to be in charge of the FHA?

One of Collingwood's clients was Wells Fargo. They were in trouble for defrauding FHA, and in 2016 paid HUD a $1.2 billion fine. That is billion with a ``b.'' Wells Fargo admitted that from 2001 to 2008, it had lied to the FHA about whether certain loans were eligible for FHA insurance. Mr. Montgomery was in charge of the FHA from 2006 to 2008 and let that fraud happen. After he left, he went to the other team, giving Wells Fargo the inside scoop on how to beat the rap.

Collingwood also represented U.S. Bank. In 2014, U.S. Bank paid $200 million for defrauding FHA. In its settlement, U.S. Bank admitted that ``from 2006 through 2011, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements.'' The taxpayers paid Mr. Montgomery to manage the FHA for 3 of those years, and he didn't stop the fraud. When he left, U.S. Bank paid him to help them get away with it. I guess it pays to be an inside guy.

I have seen some amazing cases of people spinning through the revolving door, but this one might take the cake. First, Montgomery runs an agency that puts taxpayer money on the line. While there, he looks the other way as the banks submit piles of fraudulent mortgages. The government then loses millions and millions of taxpayer dollars. Then, Mr. Montgomery waltzes right out the door and 1 month later starts a company advising the same big banks on how to pay the government back as little as possible for frauds they committed on his watch.

Look, he may have the best of intentions, but we can never expect the American people to trust Washington if we approve nominees like Mr. Montgomery. It is bad enough that he put taxpayer money at risk by looking the other way as the banks committed fraud and then bad enough that he got rich working for those same banks. Now the Senate is letting him go back and do it all over again? No way. It is finally time to crack down on the revolving door.

Mr. President, 10 years ago, as the economy lurched toward a financial crisis, millions of American families braced for the impact. Over the next few years, almost 9 million families lost their jobs and millions more lost their homes and their savings. Giant banks--pillars of Wall Street for generations--crumbled, bringing communities across this country with it.

In the aftermath of the crisis, Congress passed commonsense rules to make sure Wall Street could never again crash the economy and leave American families with the wreckage, but Donald Trump thinks that Dodd- Frank is ``a disaster,'' and he has promised to do a ``big number'' on the safeguards it created. He hired an army of bankers and bank lawyers from Wall Street to do the deed, and now Jelena McWilliams is the latest piece in the puzzle.

Here is just one example. In the runup to the crisis, giant banks proved to be terrible judges of risk and ended up sucking down billions of dollars in taxpayer bailouts just to survive. To fix this, Dodd- Frank directed the banking regulators to set strong capital standards that limited how much risk the big banks could load up on and required them to hold enough cushion to survive in case their bets went bad.

Policymakers and regulators from both sides of the aisle agree that these financial regulations made our economy safer. Former FDIC Chair Sheila Bair and former Vice Chairman Thomas Hoenig--both Republican appointees--recently wrote in the Wall Street Journal that gutting capital rules ``would weaken system resiliency.'' Current FDIC Chair Martin Gruenberg--a Democrat--said that strong capital requirements were ``among the most important post-crisis reforms'' and has opposed joint efforts by the Fed and the Treasury to undermine them.

Ms. McWilliams would drop that opposition. In fact, she is not even sure there was anything wrong with the capitalist standards before the crisis. That is not the only rule she would roll back. Donald Trump's Wall Street mercenaries have taken aim at a lot of critical post-crisis rules, and everything we know about Ms. McWilliams suggests she will support those efforts. Here is what is on the agenda.

First, there is the Volcker rule, which prohibits bank deposits from gambling with Grandma's checking money. Banks are looking to scrap this rule, even though they are raking in literally record profits, but the FDIC has to agree before there are any changes. As soon as Ms. McWilliams is confirmed, bingo. Sorry, Grandma.

Next is guidance that prevents banks from offering abusive, short- term loans similar to payday loan products. The OCC has told the banks it regulates to have at it. With Ms. McWilliams in charge, it is only a matter of time before the FDIC banks get in the game.

Third, there is also the Community Reinvestment Act, the CRA, which is designed to make sure a bank serves all credit-worthy customers in its community, regardless of the color of their skin. Lending discrimination is rampant in America, even though 98 percent of banks pass their CRA exams, but banks and the Trump appointees they send to Washington want to make the test for passing even easier. Under Ms. McWilliams, the FDIC evidently will not stand in the way.

I could go on and on, but here is the thing. It is not just that I disagree with Ms. McWilliams or think her actions will make consumers and our economy less safe; it is that Senate Republicans are stacking the deck to allow Ms. McWilliams to make these decisions without any discussion.

The five-member FDIC Board is supposed to be split between Republicans and Democrats, but the Senate is moving to confirm Ms. McWilliams before the White House has even nominated a Democratic Vice Chair for the agency. If Ms. McWilliams moves forward, the FDIC will be under complete Republican control for an indefinite amount of time. Democrats should oppose the McWilliams nomination on this basis alone.

Ms. McWilliams is the latest Trump appointee who thinks the biggest problem with our financial rules is that the government is just too darn hard on the banks. Most Americans don't feel that way. They want tougher rules on Wall Street, not weaker ones. We should listen to them because they are the ones who pay the price when things go wrong on Wall Street.

I urge my colleagues to vote no.

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