Hearing Entitled: The Annual Report of the Financial Stability Oversight Council
Committee on Banking and Currency
2026-02-04
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Source: Congress.gov
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Yes, ma'am. You're doing okay today? The Committee on Financial Services will come to order. Without objection, the Chair is recognized to declare a recess of the Committee at any time. Today's hearing is titled, The Annual Report of the Financial Stability Oversight Council. Without objection, all members will have five legislative days within which to submit extraneous materials to the Chair for inclusion in the record. I now recognize myself for a four-minute opening statement. Good morning. Treasury Secretary Besant, welcome. It's an honor to have you with us today to provide testimony as the Chair of the Financial Stability Oversight Council. Today we will examine recent actions taken by the FSOC and provide members the opportunity to address any questions or concerns regarding FSOC's 2025 Annual Report. As the 2025 annual report makes clear, economic growth is essential for financial stability. In a growing economy with rising incomes, debt burdens fall, American standards of living rise, and the financial system remains stable. It's encouraging to have financial regulators and policymakers who understand this fundamental reality and aim to foster a regulatory environment that considers how both new and existing regulations alter and impact economic growth. Committee Republicans share the commitment to promoting economic growth through the elimination of unnecessary regulatory burdens, a hallmark of the Trump administration. Since assuming the presidency just over a year ago, President Trump has built on this critical work that he achieved in his first administration to make further progress in rolling back overly burdensome regulations that stifle innovation in our economic growth. These efforts go beyond reducing just regulatory red tape.
They're about fostering an environment where financial institutions can thrive and contribute to the stability and growth of our economy. I'd be remiss if I didn't remind everyone in the room today of the doom and gloom economic predictions that we heard across the aisle as the Trump administration was sworn in.
In late 2024, Moody's analytics anticipated that a Republican-controlled government would bring 3.5% inflation, 5% unemployment, a recession, and a budget deficit of 6% of GDP. Since then, Democrats have repeatedly and wrongfully accused Republicans of, quote, tanking the economy, close quote. With most of the official data in the books, these warnings missed the mark. by a mile. Inflation came in at nearly one percentage point lower than that forecast. The unemployment rate never increased beyond 4.5 percent, no recession materialized, and GDP is on track to have three consecutive quarters above 3 percent growth. Meanwhile, the budget deficit is on track to fall to some 5.4% of the GDP. These numbers speak for themselves. Under President Trump's leadership and Treasury Secretary Besant's steady hand, the economy is back on track, reversing the damage of the previous administration. Throughout the 119th Congress, Congress and committee Republicans remain steadfast in our goal of reinvigorating the commercial banking system and make life more affordable for our American families. That commitment is why I introduced the Main Street Capital Access Act with Subcommittee of Financial Institutions Chair Andy Barr last month. Our community banking package is designed to revitalize local bank formation, right-size regulations that are intended for far larger and more complex institutions, ensure that community lenders can focus on serving our families, small businesses, and our local economies. This bill also aligns with the administration's efforts to right-size regulation and reflects the committee Republicans' dedication to ensuring that financial operations focus on safety and soundness with a tailored approach to supervisory complexity. Similarly, our Bauer-Potterson Housing for the 21st Century Act addresses housing affordability head-on by reducing the burdens that have made homes and apartment construction untenable.
Improving affordability requires directly expanding the housing supply. Paired with Main Street Capital Access, Americans will benefit from more homes and more affordable ways to finance them. We're grateful for your time today, Mr. Secretary. We look forward to the discussion, and I yield back the balance of my time. I now recognize the ranking member of the committee, Mrs. Waters of California, for a four-minute opening statement.
Thank you very much, Mr. Chairman. Last week, Donald Trump marked his first year in office with consumer confidence plummeting to a 12-year low. That is not a coincidence. Trump promised a so-called golden age. But apparently he only meant one for his family and billionaire friends instead of helping families. Trump's trade wars are driving up the price of goods like groceries, clothing and furniture. Small businesses and farmers feel it, too. And we all know exactly who is to blame. Instead of lowering costs, Donald Trump has doubled down on chaos and cruelty, while handing more power and more freedom to Wall Street. For example, instead of directing the Financial Stability Oversight Council to address threats to our economy, Mr. Secretary, it appears that using it to do the exact opposite and deregulate Wall Street, while Trump claims he wants to cap credit card interest rates, His administration has repealed rules that curbed excessive credit card late fees and shuttered the Consumer Financial Protection Bureau, the very agency that returned $21 billion to Americans after they were ripped off.
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