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Gary Gensler’s Replacement As SEC Chair Grilled in Confirmation Hearing
Recorded: March 27, 2025 Duration: 2:27:09Space Recording
Short Summary
In a dynamic discussion, SEC Commissioner Hester Purse and other key figures addressed the evolving landscape of crypto regulation, emphasizing partnerships, growth opportunities, and the importance of fostering innovation while navigating challenges in the market.
Full Transcription
really invite people's engagement. We want to make this as productive as possible. We've got
a great set of people working on this, but it's better for us to set priorities if people come
in and help us set those priorities. Well, as a founder that has definitely had sleepless nights
in the past working in this space, I would say, because I've always wanted to build here.
So we set up shop here in the US.
I would just say that I would love an invite.
I'd love to come down.
Love the chatting person down there in DC.
Well, I mean, consider the invitation.
All right.
An open invitation.
There we go.
We would love to come talk to you.
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All right, the head of the crypto task force
and commissioner
at the SEC, Hester Purse, back on coinage. Commissioner Purse, so good to see you again.
Zach, it's great to be back. I'm going to start with my disclaimer. That hasn't changed.
My views are my own views as a commissioner, not necessarily those of the SEC or my fellow
commissioners. Yes, indeed. And now I've realized I've heard that disclaimer for quite some time.
We've been doing this a while now, all the way back to my Yahoo Finance days. I was reflecting on that. I think that was during the pandemic. You took that call in the back of a car. Look at how much younger we looked. It was so it was nice back then. And this is the first interview that we've done since you've become the head of the crypto task force. So I have to congratulate you on this new role.
And last time we chatted, it was in December. I've gone to the back of the car to the front of the car. It's a big upgrade. And also, in that sense, I like it better. Yes. Well,
in this sense, when we think about how much you're doing in the driver's seat,
I don't think I even understood when we chatted in December how quickly this would go.
So when you think about just like the last few months, I mean, I wanted to ask you what you think your biggest win has been with everything that's played out.
Well, I mean, I think the biggest win is just having the ability to work with the staff in
the building towards something productive. And so I don't know that I would point to one specific thing to date. I mean,
getting, getting SAP 121 off the books, I think was certainly helpful. Working our way through
some of these enforcement actions has been helpful. And then I think starting the productive
process of working with people, getting questions out for people to answer. And we've gotten some great engagement already.
I think those are all big wins.
And I'm hoping that we can have a big win tomorrow.
We have our first roundtable that will be happening.
And I think that will be really helpful as well.
It did seem like when you made the announcement for Saab 122
and saying goodbye to Saab 122 and saying goodbye
to Saab 121, it was a little bit of a, of a, there was some spice, there was some added spice
to that one. It felt like Commissioner Peirce. Was there anything a little bit extra on there?
I mean, you know, I think there definitely is some, that was reflected a little bit of my
frustration over the past several years.
It's a really, to me, when I look back, it's really a missed opportunity.
We had the opportunity to work on some really difficult and interesting legal and policy issues.
our enforcement division to just hammer an industry into a mold that doesn't work for it.
That's not even helpful for anyone.
And so I think that that tweet probably reflected a little frustration.
Well, Twitter, you know, X, I should say, is all about that, I suppose.
So it was, I saw it, and I think a lot of people in crypto were like, oh, well done.
So very interesting to see that all play out. And as we said, things are moving quickly.
But I want to look ahead now that it sounds like there are reports that potentially we could see
assumed chair Paul Atkins get confirmed as soon as, perhaps, hopefully, later this month. And I'm
curious, you know, given how fast everything
has played out, what should people expect if he is confirmed for him to come in? Are there things
that you're waiting to kind of get done until he's in? And what might those be?
No, we really are moving forward. It'll be great to have him here. He's someone that I worked with
before and really am looking forward to having his input as we think about how to deal with some of these issues. But I think it's incumbent upon us as
an agency to continue working. Chairman Ueda, while he's acting, is very supportive of us
making progress on crypto issues. And I think the work that we do now can be helpful to
the incoming chairman when he gets here to get a sense of where the issues are and where some
potential solutions might be. And I think anything that we get done final before he gets here will be
helpful for him as well, because he'll have a lot of other things on his agenda.
Well, I've never worked in the public sector, but I assume it's probably similar to the
private sector, where you never want to snatch an easy win from your incoming boss, or any
boss, really, in that sense.
And I think that there were some things that you said you would expect to weigh in on quickly,
one of those things being staking via the ETFs that have been approved, Ethereum being one
of those examples, I suppose.
And I'm kind of surprised that it hasn't happened yet, but that's just my opinion,
not speaking for the rest of Coinage or my fellow commissioners either.
But I am curious if there is a timeline for that to kind of be considered.
That seems like something that potentially you would wait for, I guess.
Knock, knock.
Number one broker here for the number one hitmaker.
Thanks for swinging by, Carl.
No problem. So what are all those for you?
Well, I mean, as to the question of whether we hold off on things so that Chairman Atkins, assuming he gets confirmed, will be able to take credit.
He's not that kind of person. He's not someone who's looking for credit for himself.
He really is someone who cares a lot about the issues. He cares about our capital markets. He
cares about getting the regulation right. And that's one of the things I really like about him.
And so that, I can't speak for him, but I don't think that he would be someone who would say, if you can get something done, wait until I get here. No, he'd say, if you can get it done, get it done.
There should be an ability for people to participate in staking or to do in-kind redemptions.
There's a process for doing all of these things.
We have to consider all of these issues.
It's not just turning a switch to turn this on.
So I think it's important that people know that there's an openness to these questions.
Staking and in-kind redemptions are something that
we heard about, even as we were approving those. But things do take time.
Then, assuming then that we've already answered that you're not speaking for your fellow
commissioners, nor your potential incoming boss, if I were to ask you, Commissioner Peirce,
I think technically, which we're going to get into at the end of this interview, your term is up in June. But is it more likely that we see these things, the two that you
mentioned, play out ahead of that timeline, or more likely that it is after there, in your opinion?
Yeah, I mean, I don't know that I can speak that precisely to the timing. One thing I'll say is
that although my term does end in June, there's a provision that allows you to stay on for some
amount of time if your replacement hasn't been named. And so, you know, it's not that I have to
walk out the door in June. And I do think there's quite a bit of work to be done. We talked about
those two issues, but there are a lot of other issues I'd like to see resolved. And it would be fun to be part of resolving those issues. So I'm not, you know, I still have unfinished work. Fair enough. It sounds like
I will not be holding my breath, or I should be holding my breath for a little bit longer than
perhaps June, as I have been on the staking stuff, as we talked about before. So we'll put
Well, again, I mean, I really don't want to predict the timeline for that. I do want people to know that if there are, whether it's that issue or whether it's another issue where people think, you know, it would be really helpful to get some quick action.
I want people to come and tell us what those items are, where they want quick action, and especially if they have a solution of how to get there. On the ETP staking point, clearly we work with people coming in and talking to us about those
people who are, you know, the trading venues where those are being offered. That's how that
typically works. So, you know, they're working with the ETP issuers on those kinds of issues.
So, again, we welcome people coming in and chatting with us about that.
I do want people to know the doors open, but it's hard for me to predict timelines.
For sure.
And perhaps even harder for us to cover from the outside and try and think about when these things will happen either.
But I always appreciate your take on the details behind the scenes.
And I guess to kind of further that
point, there has been accelerations in terms of people now trying to interpret the tea leaves as
well and file a lot more of these things faster, I think, when it comes to ETFs around crypto.
There's even one potentially to talk about in terms of Pudgy Penguin's token launched from
NFT community. Today, we saw an asset manager, Canary Capital, filing for that one. And again, not getting specifically into anyone filing, but it does
seem like there is a theme of more ETF applications around crypto. And in the past,
under Gary Gensler, even for Bitcoin, it was essentially the timelines that the SEC had to
act as the thing that forced the SEC to act. And I just get the sense that it's the case now that
things might move quicker in that sense, that you guys aren't going to wait for those forced
timelines to act. And so is there an acceleration of kind of the way that the SEC wants to handle
some of those applications? Well, I don't know if I'd put it that way, because there is work that
has to be done. You've got to look at the facts and circumstances of each application that comes in. And we are getting a lot, which means that the staff that
processes those applications is pretty overwhelmed and inundated with work. So there's the practical
reality of having to work through those things. We are thinking about what makes sense in terms of how best to process these
applications. We want to make sure that we're applying standards that are predictable and that
apply across different types of assets. And so that's something that we're thinking about. How
can we make ourselves more efficient and how can we make it more efficient for people thinking
of filing these things so that they have a sense of what we expect and and um therefore have a
sense of how to move forward well let's talk about one area where you have done that very clearly
which is in meme coin so we can shift to that because i think excitingly it might be the first
time for me to play devil's advocate in an interview with you now that you're in the driver's seat, as you said, and not in the
backseat anymore.
But I think on meme coins, it was interesting, and I kind of understand where you're coming
from in terms of, we've talked for years now, Commissioner Peirce, in terms of libertarian
ideals, the idea of not having a nanny state to protect people in the investments that
they can now make, and drawing the line of saying the SEC is not going to be the ones
overseeing meme coins. And you said that very clearly in the staff note on meme coins.
But I do wonder if there's any fear around unintended consequences of doing that when you
then say it's not us, but there's still, you know, other agencies that could. I'm just kind of curious
what the thinking was around it and if there aren't any consequences
to potentially see play out. I certainly think it's good for a regulator to understand its
jurisdiction and not to try to act outside its jurisdiction. There are a lot of bad things that
happen outside of the SEC's jurisdiction and a lot of them really give me concern and I worry about them.
But that doesn't mean it's my responsibility to fix them.
I have to stick within the parameters that Congress gave me.
And so I think one thing we can be helpful in doing, and this is one of the things that I set out, one of the tasks I set out for our task force, which is to say, let's identify
areas that are not within our
jurisdiction. Another regulator may claim those. They may be within someone else's jurisdiction.
They may be in many other regulators' jurisdiction. But let's put it out there. If Congress decides,
hey, the SEC would be the perfect regulator for meme coins, they can give us that authority if they choose to. But I think it really doesn't serve
anyone well to say, you know, every time bad activity happens, we're going to take action,
because that's exactly the kind of thing that leads people to have no idea what the jurisdictional
boundaries of the SEC are. And that lack of clarity makes it extremely difficult for people. And so I think
it is really, you know, if we were to say, well, yeah, but we see lots of bad conduct happening in
the meme coin space, so we'd like to have the SEC there. Well, I can cite you other examples
of really bad conduct that you probably wouldn't want to have the SEC regulating because it's,
you know, it's,
you can't say just any time there's, there's some kind of thing where you could lose money,
the SEC gets to jump in. Then our, our territory is going to, our jurisdiction is going to have no bounds at all. I do. I understand that. But I guess, you know, one of the things is just kind
of the flipping of the position of Chair Gensler on the idea of those is not actually all that dissimilar from you coming out and saying meme coins are not under
our jurisdiction because they basically proliferated because it was the only thing that it seemed like
was safe from the SEC regulatory crosshairs under his administration. And we saw the proliferation
of those. And then we saw a lot of people damaged and hurt in terms of consumer protections from
them. And even now with Trump's meme coin
and malaise, it was very interesting to see people in crypto basically calling and saying,
all right, hold on, maybe Chair Gensler might have had a point around consumer protections
and the integrity of markets as well, which I think is a very interesting thing to consider now,
because similarly, post-February and the idea of saying meme coins are kosher,
or at least that they don't fall under the SEC, it was interesting to kind of see capital formation dry up around meme coins as if everyone's saying, I don't there could be a spillover effect in the same type
of thing that Chair Gensler was always afraid of, which is kind of this idea of investor confidence
retreating. Is that fair? Global industrial. We picked up new business. We need more pallet jacks.
We can supply that. Okay, so there's a lot in that set of questions.
First thing, I do agree with you that part of the problem has been that we, as an agency,
have made it very difficult to do anything that might potentially be securities related
and that has resulted in people therefore doing things that have actually less value than they would otherwise have done because they think, oh, the less value things are less likely to trigger the securities laws.
And that's terrible. And I think we're trying to get to a place where we actually build a framework that encourages people to do what they think is most useful with their time. And we will try to work with them
to address how that interacts with our regulatory framework.
So then you raised the question of, well, are you concerned about investor confidence,
market confidence? We do not have the ability to regulate the entire
marketplace. We have a job, which is to make sure that the markets that we regulate
are operating in a way that people feel, investors feel comfortable investing.
Of course, with skepticism, right? You always have to make your own decision. And that's the
point I'm always hammering home. We never sign off on an investment, even if we had said that
meme coins were within our jurisdiction, it wouldn't mean that we're saying we sign off
on them, right? That's always a question that, you know, we always expect the investor to do
her own research. But then, you know, we're working on this framework for
the markets we regulate. And so when something does fit within it, we are thinking about those
kinds of things, which is why when something gets packaged into an ETP, an exchange traded product,
an exchange traded product, we are going to apply the standards. And as I said, we're trying to
be very clear with people about what the standards are and have those standards apply
across different types of assets. And so I think that should help to protect our markets.
Well, as I think, as you know, again, shifting from kind of the days I use the Yahoo interview
thing, because I'm thinking back to just covering the space to now entering the space as a crypto founder myself being in the space with coinage now.
It is very interesting to think about that because I reflect on the GameStop saga in terms of when retail really thought like the markets weren't working for them.
for them. We saw, you know, the House testimony, we saw Roaring Kitty, everyone appear in front
We saw, you know, the House testimony.
We saw Roaring Kitty.
Everyone appear in front of Congress.
of Congress. And I interviewed, you know, at one point, Chair Patrick McHenry on the House
Financial Services Committee talking about that. And I just worry if that's the case. Like,
are there things that you see now playing out as you let crypto companies come in that you'd be
worried about in terms of the same market failures that happened with Robinhood and the idea of the
markets with GameStop
could potentially happen again if retail similarly feels like this thing that was created to kind of
serve them or at least give them evil footing is potentially maybe not that.
Well, I mean, we're talking about a lot of things. Your question, I think, encompasses a lot of different things. One of the things that has looked most promising to me about the technology underlying crypto
is the ability to eliminate intermediaries, because intermediaries have been a historical
point of failure, a historical point where customers could be taken advantage of either by being told you can't get access to the service
or by having the centralized intermediary behave irresponsibly with their funds or their assets.
And so part of the promise of the technology is the ability to enable people to avoid intermediaries when they prefer to. But we
know that a lot of people will still want to have an intermediary. And so you'll end up with
a system in which the infrastructure may well be based on a public blockchain,
but there will be someone who retail investors are engaging with directly. And so for those kinds of
intermediaries, we probably want to look to our history with traditional financial regulation
to see which elements we need to port over to ensure that the same types of problems don't
emerge in this area as we've seen in the past with centralized
intermediaries doing other kinds of things. And so I think that's exactly the exercise that we
in Congress are engaged in right now, looking to try to figure out what does that right regulatory
framework look like. We don't need to copy exactly the framework we have now for traditional equity markets,
for example, because we've probably learned from the way we regulate those markets that
maybe we don't need that precise and prescriptive of a rulebook.
Maybe there are things that we can do differently in this space to allow people more flexibility.
But what are the essentials of that regulatory framework?
So this is an opportunity for us to take the best from what we have and create a brand new
regulatory framework that addresses some of the problems that you're raising in your questions.
Yeah. Well, I mean, the problems are ones that we witnessed from the crypto side,
like seeing the Terra collapse and the idea of what happened there from the crypto side and market makers being involved and the
idea of what happened with GameStop and market makers being involved. It's very interesting to
kind of pair the two and talk about it from a market infrastructure perspective. And I just
hope that as more and more voices that are within the crypto community that are large and maybe
represent exchanges, seeing Citadel and some of these other market makers get involved in crypto, you can't help but say, are we about to repeat a lot of the same
problems that happened for retail in 21? And I think it's a fair question, but it's definitely
one that I know that you and the crypto task force would be well positioned to handle. And
you certainly are much smarter than me on those issues. But it's just something that I'm just
curious if you're worried about at all. Well, I mean, I think we shouldn't
deny the fact that just because you slap the word crypto on something doesn't mean that
problems that we've seen in other areas are not going to crop up here. They could very well. And
I think it's also a time for us to remind investors and consumers that, you know,
you've got to exercise skepticism when you make decisions about what you're putting your money
into. You have to think about whether you can afford to lose that money. You have to think
about the risk tolerance that you have and whether this is the right asset class for you to put your money in doesn't match
up with your risk class, with your risk tolerance. And so there are a lot of these kinds of things
that, again, I agree with you. We can learn lessons from things that have happened in the
past, whether in the crypto world or outside the crypto world, that have not gone well,
where people have gotten hurt. We can certainly learn lessons
as regulators, but we can also remind people out there in the world who are looking to get
involved in this as investors or consumers, that there are risks and they have to go in with their
eyes wide open. Well, I know we're running out of time. So I heard your answer earlier on in the
interview that it sounds like I can check the box in terms of, I had written down,
make sure Commissioner Purr stays on longer than June.
So I'm gonna check that box and say we can put that to bed.
Beyond it, I wanted to ask you to just go full circle.
The last question is, things changing so quickly.
Obviously you got a lot done in the first three months here,
but what is the craziest thing you think
most people are discounting in terms of what the SEC can get done before 2025 is over? What would be your biggest win next?
When you have Fios Home Internet from Verizon, you can save big on the movies and shows you already
love. Well, I mean, I think this is where I really need people to come in and help us think through this.
But I would like to get some relief out there so that people who have been waiting to do some work in this space can start doing that work even in 2025.
And so I think that's where it would be helpful for people to come in and say this is relief that we could use immediately.
We have tools that we can
use at the SEC. That's, you know, obviously if what you're asking for requires notice and comment
and rulemaking, that could well extend beyond 2025. But if there are things that we can do
using no action relief or exemptive relief or guidance, then that is something that we should
take into account. And I should note,
Zach, that there was also another guidance document that came out today on mining. So I
point people to that to take a look at that. And again, really invite people's engagement. We want
to make this as productive as possible. We've got a great set of people working on this, but
it's better for us to set priorities
if people come in and help us set those priorities. Well, as a founder that has definitely had
sleepless nights in the past working in this space, I would say, because I've always wanted
to build here. And so we set up shop here in the US. I would just say that I would love an invite.
I'd love to come down. Love the chatting person down there in DC. Consider the invitation.
All right. An open invitation.
There we go.
We would love to come talk to you.
We've got a portal on our website, which is if you go to the SEC's website, you'll see the crypto web page.
We've got a place there where you can either put in a request for a meeting or put in a written submission.
And we really do want to hear from people and meet with people.
So you're invited. Very good. Coinage, you're invited to D.C. That's what we're doing. And we could do want to hear from people and meet with people. So you're invited. Very good. Coinage, you invited to DC. That's what we're doing. And we
could set this up in person. Commissioner First, I can't thank you enough for the time as always.
Speak for the whole entire Coinage community. Thank you again for the time and good luck.
Congratulations again on everything the Crypto Task Force is doing. Thanks. The rest of the year. But you mentioned Tim Scott and the stablecoin bill. I just want to
play a little clip of what he said just a couple of weeks ago, because it's kind of rare to see,
you know, it's the genius act. It's the stablecoin bill. It's getting so much attention. And
it's been something that even Maxine Waters and Chair Patrick McHenry tried to get done under the
last administration,
didn't go anywhere. And so I just want to play a little bit of what he said about how much of a
priority it has become in D.C. Take a listen to what Tim Scott said not too long ago.
My theory is the first 100 days of a new administration is important. On the Senate
side, my goal is to be as aggressive as possible to achieve an objective of having bills
for the Senate in 100 days. So first 100 days, I mean, we're getting close-ish, but I mean,
the idea of pushing the stablecoin bill through there is going to be big. And I guess just backing
up too, John, in terms of everything you learned by running as a politician up in Massachusetts, going head to head with Elizabeth Warren, taking on the anti-crypto army. How big
of a night and day shift is it really when you kind of like try and explain it to people that
you've got an AI and crypto czar standing up there next to the head of the Senate Banking
Committee now and Tim Scott saying, look, in the first hundred days, we're trying to get this
through and actually doing it. I think it's what happened in the Senate tells you everything you need to know. Elizabeth Warren,
as you know, Zach, was trying to file these amendments to the Genius Act, and she got shot
down and got shot down. And the other issue of exigency, and I'm someone who's been talking
about this, it's kind of hard to believe, but a year from now,
Zach, it's going to be full midterm election campaign seasoning. And then the midterms come
in and we know that historically speaking, the party that's in power sometimes loses one of the,
whether it's the House or the Senate. And so I think there's a sense of exigency just in case the
midterms don't go the administration's way and the House might flip. Well, we need to get this
done. And I think that's what you're seeing. And I think it's great news. This is going to drive
the, here's the thing that people need to understand. We've went from digital assets,
be considering an asset class instead of digital assets? They're now being
considered national assets, right? We have a stockpile where the government is going to hold
these other crypto tokens, and we're going to aggressively pursue the acquisition of Bitcoin.
You have Cynthia Loomis, Senator Loomis's bill, wanting to acquire 1 million Bitcoin in five
years.
I mean, you just couldn't be any more bullish than that.
Think back over the last month.
How many hours have you lost manually applying them?
If you're like the IT professionals.
They had a crypto council, a crypto czar.
It really is just unbelievable when you start thinking about it.
Yeah.
Well, I wanted to ask you too personally, because obviously I haven't chatted with you since.
I saw you on the campaign trail before the race.
I wanted to ask about your reflection since.
Obviously, I think, you know, I don't even know.
We didn't even get a chance to talk about it,
but I didn't know if you thought, you know, going into that,
that the goal was to win because Elizabeth Warren is entrenched in Massachusetts.
It's just kind of like she's been there forever.
So you chose the hardest battle you could have.
But clearly, I mean, what's been the takeaway for you, John, as you reflect on that race,
the idea of kind of at least moving the Overton window where it kind of was, again, the anti-crypto
army was her thing.
What do you make of everything you put out there?
And by the way, congratulations on actually doing it because you don't see it that often.
Someone who's not in politics getting into it, running a race the way you did.
So just first off, my hat's off to you for doing it.
But what's been your reflection since, John?
Thanks, Zach.
Listen, you know, a lot of people don't realize this is how crazy Massachusetts is.
You know, technically, you know, realistically, I got my butt kicked, right?
Technically, realistically, I got my butt kicked, right?
She beat me by 20 points, but I was the first Republican in over a couple decades to get 40%. Mr. Gould is no stranger to the OCC.
He has first-hand experience at the agency.
He understands its critical mission, ensuring the safety and soundness of our banking system, and ensuring banks provide fair access to financial services, not pushing a far-left political agenda. regulators weaponized their authority to debank politically disfavored industries and individuals,
and most recently, the crypto firms, and what we now call Chokepoint 2.0. Mr. Gould, I hope you will
end debanking and return the OCC to its true purpose, chartering and supervising banks to ensure they serve all
credit-worthy customers, not just those who fit a particular mold. Before I continue,
let me thank Rodney Hood, the acting OCC Comptroller of the OCC. He's done a great job
and formed a foundation that is strong, common sense pro-growth reforms
that we need to return. Notably, Mr. Hood has removed references to reputational risk
consistent with my firm act from the OCC Bank Examination Guidance and instructed examiners
to no longer examine for reputational risk. Luke Pettit, nominated to be the Assistant Secretary
of the Treasury for Financial Institutions, brings key experience to this role, including
serving on this committee. Mr. Pettit understands the challenges facing American families and
businesses, and he knows how to build consensus and compromise when necessary to solve tough financial policy issues.
Finally, former Congressmember Marcus Malinaro, nominated for Federal Transit Administration,
brings critical experience from his time in the House, on the House Transportation and
Infrastructure Committee, and a long career in local government, which I really appreciate,
making him well-qualified for this role.
His experience as Dutchess County's executive reinforced his belief that transit and infrastructure
challenges require local solutions and oversight.
I am confident that he will propose common sense, pragmatic solutions to the agency,
ensure that our mass transit is effective and safe, and connect communities with new opportunities,
especially new housing opportunities for all Americans. By confirming these nominees, we can
unleash a golden age of prosperity, where families can once again afford to buy a home,
save for the future, and achieve the American dream. Let's get to work. Let's get these noms
confirmed, and let's make America great again. Thank you. Ranking Member Warren.
Thank you, Mr. Chairman. So we have another jam-packed panel of critically important regulators to consider today and only 80 seconds per nominee to question each of them.
I believe we need more time, longer question periods and multiple rounds of questions, but since that's not happening, I'll just jump right in.
Co-presidents Trump and Musk are in the midst of a dangerous purge of the federal
government. They've shut down the Consumer Financial Protection Bureau. They've laid off
or bought out thousands of other financial regulators. And just last week, they tried to
handcuff the Federal Trade Commission by attempting to fire the two Democratic commissioners. This is plainly illegal, and if it's allowed to stand,
it will do grave damage to millions of families that will get scammed,
all for the benefit of Donald Trump's campaign donors.
Why are they trying to dismantle the federal government?
Well, Elon Musk gave us one really good example.
He said that he intends for his
new company, X Money, to, quote, become half of the global financial system. When financial
regulators like the CFPB and the FTC enforce the law, Elon could be stopped cold. And that's why President Trump, Elon Musk, and the
Doge team are taking a chainsaw to the people in government who enforce the laws. They want to make
themselves even richer and more powerful. So apart from the bread and butter policy questions I'd have
for these nominees under normal circumstances,
I have very serious concerns about their willingness to aid and abet illegal ransacking of our government.
Mr. Molinaro, if confirmed, you will serve as the head of the Federal Transit Administration.
I know you believe in the mission of the agency that you want to lead.
I know you believe in the mission of the agency that you want to lead.
In our conversation, you promised to advocate within the administration for public transportation,
and you pledged to advocate for the FTA's career staff and frontline workers at our transit agencies.
We need a strong FTA that can deliver projects on time so riders in Boston and Charleston
and in your hometown or home county, Dutchess County, have better, safer service. Mr. Pettit,
you have been nominated to be the Assistant Treasury Secretary for Financial Institutions,
which is responsible for coordinating financial regulatory
and consumer policy, monitoring the insurance market, and protecting critical financial
infrastructure. I am concerned that you intend to support the Trump administration's next round
of big bank deregulation and bailouts, while Elon Musk's doge tightens its grip on the Treasury Department.
Mr. Gold, you would serve as the controller of the currency, which is responsible for
ensuring the safety and soundness of the national banking system and supervising some of the
biggest banks in the country.
Unfortunately, your track record, including as chief counsel of the OCC
during the first Trump administration and as a lawyer for the big banks, suggests that you may
see this new role as a new perch to help out your Wall Street friends by further weakening
bank regulations and by letting big banks off the hook when they violate the law.
And then there's Mr. Atkins, who is the nominee to be chair of the Securities and Exchange Commission.
It is the SEC's job to ensure that our capital markets remain an engine for economic growth
and innovation. That requires stamping out fraud and self-dealing in our markets
so that giant corporations don't scam average investors out of their retirement savings.
Mr. Atkins has spent almost his entire career helping billionaire CEOs like Sam Bankman-Fried,
who committed one of the biggest financial frauds in U.S. history as the CEO of the failed crypto platform FTX.
He's been working with those folks to help them get even richer.
In the six years that Mr. Atkins wasn't making millions of dollars off clients like Sam Bankman-Fried,
like Sam Bankman Freed. He was a commissioner at the SEC in the lead-up to the 2008 financial crash
when he voted to loosen the reins on big investment banks like Lehman Brothers and Bear Stearns.
Mr. Atkins has an almost perfect track record. He got pretty much everything wrong in the run-up to the biggest financial crash since the Great Depression.
That is not a record that deserves promotion.
We have a lot of ground to cover today, Mr. Chairman. I'm ready.
Senator Crabble, you are now recognized to introduce our next nominee.
Thank you, Mr. Chairman. It's my honor to introduce Jonathan Gould,
President Trump's nominee to serve as Comptroller of the Currency.
Jonathan has spent nearly 24 years in the financial services industry, including serving as my chief counsel when I was the chairman of this committee. From 2018 to 2021, he served as the OCC's Senior Deputy Controller and Chief Counsel,
where he led the law and licensing departments, played a significant role in managing the entire agency,
and oversaw the implementation of the Economic Growth Act of 2018.
In addition to public service, he's significant private sector experience as a consultant and lawyer, as recently as at the law firm of Jones Day, which will give him valuable perspective when considering the cost of potential rules.
And in addition to this impressive background, Jonathan is also well-liked and respected by colleagues and has the demeanor and character to be an effective controller.
President Trump made an excellent choice in selecting him for this position,
and I look forward to supporting his nomination.
Senator Haggerty, you're recognized.
Thank you, Mr. Chairman, and it's a great honor for me to be with such a wonderful group of nominees today.
I have a particular pleasure today, though, to introduce a longtime
friend of mine. We're roommates in law school. Actually, when I talked with President Trump
about Paul when he was considering his nomination, I begged him not to hold that against Paul,
and he certainly didn't. But as I said, I've known him for a very long time,
and since before I met Paul, I knew about him and he has been known forever
for his character, for his intellect and his unrelenting work ethic. Today, those qualities
are going to serve the American people exceptionally well. Given the many years of private practice
and his prior service as an SEC commissioner,
Paul has developed an unmatched understanding of financial markets and their regulatory challenges.
And I've known Paul not only as a friend, but as a client,
because I've called Paul and his team in to help the companies that I've invested in
navigate some of the great challenges of the financial services regulatory environment and his skill has been unwavering. Paul knows
better than anyone that our nation's global competitiveness fundamentally
rests on the strength of our capital markets. He's a true public servant and a
great American. If you have the opportunity to meet his three sons, two
of them are here today that he and Sarah have raised together If you have the opportunity to meet his three sons, two of them are here today,
that he and Sarah have raised together,
you'll know that Paul is a man
of the highest caliber and character.
Our nation deserves a man of Paul's caliber
steering the SEC.
I urge all my colleagues to support his confirmation.
Senator Britt?
Absolutely. Thank you so much.
Chairman Scott, Ranking Member Warren, and all of my colleagues here on the committee,
I appreciate the opportunity to introduce an exceptional nominee for the Federal Transit Administrator
and my friend, Mark Molinaro.
As chair of the Subcommittee on Housing, Transportation,
and Community Development with jurisdiction
over the Federal Transit Administration,
I am particularly honored to welcome you
to this committee today.
I wanna thank you for your willingness to serve
and oversee so many important issues.
Mark brings to this role a rare blend of executive experience,
bipartisan leadership, and an unwavering commitment to public service. Given his experiences,
Mark possesses the essential qualities for this role, a proven ability to build consensus on both sides of the aisle, and a strong understanding
of the complex transportation policy, both at federal and local levels. As a former county
executive of Dutchess County, New York, and as a member of Congress, he has demonstrated time and again how to deliver real results for communities, both urban and rural.
Mark understands that transit isn't just about buses and rail lines, that it's about connecting Americans to opportunity and ultimately helping them achieve their American dream.
American dream. He also knows firsthand the importance of making thoughtful and effective
investments and infrastructure that supporting economic growth and enhancing the lives of
everyday Americans and working families should be the priority. I am confident that under Mark's
leadership, the Federal Transit Administration will prioritize safety, innovation, and accountability,
and will ensure that the transit infrastructure serves all Americans. It is my honor to introduce
Mark Molinaro today, and I urge this committee to confirm his nomination.
Senator Heredy? Thank you, Mr. Chairman. And again, I hope everybody that is sitting along
the walls here today takes special note, because all the staff does such a wonderful job of
supporting our efforts. And today, it's my great privilege to introduce one of my staff,
someone who I think the world of, Luke Pettit. For more than three years, Luke has been an indispensable member of my staff,
and on so many levels, he's not only been a great advisor, but a wonderful friend.
His service at the Federal Reserve and in the United States Senate has given him a deep
understanding of financial institutions and of our policies. To unlock our economy's full potential,
and of our policies. To unlock our economy's full potential, we need leaders who will maximize the
competitiveness of our financial system. For this task, there is no one better suited than Luke
Padden. Beyond his many qualifications, Luke is a leader in the truest sense. And Luke, from a very
very personal level, I want to thank you for the leadership that you provided to my sons.
personal level, I want to thank you for the leadership that you've provided to my sons.
They think this guy walks on water. He's admired not merely for what he knows,
but for how he carries himself. He carries himself with humility, with selfless dedication
to the mission at hand. This kind of leadership is exactly what our government needs.
Luke will bring his exceptional commitment and capability
to the role that he's being brought before this committee for today, and I urge my colleagues
to support his confirmation. Thank you.
Thank you, Senator Hagerty. Will the nominees please stand? I'll swear you in. Please raise
your right hand. Do you swear or affirm that the testimony that you are about to
give is the truth the whole truth and nothing but the truth to help you god
do you agree to appear and testify before any duly constituted committee of the senate
thank you very much you may be seated your written your written statements will be made
part of the record in its entirety please keep keep your oral comments to five minutes, and I will hold all of us to five minutes
as well.
So if you hear a tapping, it will only get louder if you're over five minutes.
He yields his bags.
Good example.
Thank you very much.
We'll start with Mr. Atkins.
You're recognized for your five minutes.
Hit your microphone button as well.
Thank you, Mr. Chairman.
Chairman Scott, Ranking Member Warren, and members of the committee,
thank you very much for the opportunity to be here today as President Trump's nominee
to be Chairman of the United States Securities and Exchange Commission.
I've greatly enjoyed meeting with many of you and your staff over the past few weeks,
hearing your priorities for the SEC and the United States financial markets.
I look forward to working with the members of this committee to pursue the SEC's three-part
mission, protecting investors, maintaining fair, orderly, and efficient markets, and
facilitating capital formation.
And I need to thank Senator Haggerty for those warm and generous words
of introduction. He summarized some of the things I've done at the SEC and elsewhere.
Thank you very much. I'm grateful to my family members here today. Sarah, my dear wife of
35 years, and my son, Stuart and Henry. I cannot leave out my third son, Peter,
who's watching this hearing from the West Coast.
Senate confirmation and public service
are not without challenges,
and I greatly appreciate their encouragement,
love, and support.
To President Trump, thank you very much
for the trust and confidence that you're placing in me
to lead this agency.
With my fellow commissioners and members of this committee and SEC staff, I look forward to working to ensure that the United States
is well positioned to seize on the new excitement for investment and economic opportunity that
President Trump's leadership and pro-growth policies have inspired. I'm fortunate to
have served previously at the SEC, first on the staff of Chairman Richard Breeden as an attorney fellow and ultimately as chief of staff.
I then served as counselor to Chairman Arthur Leavitt after his appointment by President Clinton.
From 2002 to 2008, I was honored to serve as an SEC commissioner.
In that time, I advocated for a greater transparency at the agency and emphasized robust cost-benefit
analysis when considering new regulations.
I thoroughly enjoyed working with my fellow commissioners and staff to tackle those difficult
challenges.
After my term at the SEC concluded just before the subprime mortgage crisis of 2008, the
Senate called me back to serve on the Congressional
Oversight Panel for TARP, where I had the pleasure to work with then Chair and now Senator
and Ranking Member Warren during a very crucial time.
In the private sector, I am CEO of Potomac Global Partners, a 70-person strategy, risk
management and compliance consultancy with people in New York, Chicago,
Tokyo, and Washington. My time in public service and in the private sector has allowed me to
see firsthand how regulations, including those of the SEC, affect markets and investors.
They can stoke innovation, facilitate investment goals, and create opportunities or burdens
on businesses' ability to compete
and serve their customers. Implementation of regulations, therefore, is crucial.
It's one thing to write a regulation, quite another for it to achieve its intended goal.
Regulation ideally should be smart, effective, and appropriately tailored within the confines of the regulator's statutory
authority. In short, clear rules of the road benefit all market participants. Unfortunately,
lawyers do not speak the same language as business people or compliance professionals or IT staff.
It takes knowledge and experience to translate and anticipate the issues that inevitably
arise among these various professionals tasked with implementing regulations appropriately
and effectively. The breadth and depth of my combined experiences over the past decades
will inform my approach if I am fortunate enough to be confirmed by the Senate. It takes industry experience
and focused application to ensure that customers and investors of financial services firms
benefit from efficient, effective, and well-designed regulation. Our goal at the SEC should be
to facilitate those efforts, analyze their effectiveness, and then use our enforcement power, if necessary,
to cure and rectify wayward actions. Since 2017, I've led industry efforts to develop best practices
for the digital asset industry. I've seen how ambiguous and non-existent regulation of digital
assets create uncertainty in the market and inhibit innovation.
A top priority of my chairmanship will be to work with my fellow commissioners in Congress
to provide a firm regulatory foundation for digital assets through a rational,
coherent, and principled approach. So this is a pivotal moment for our economy. Entrepreneurs,
businesses, and individuals here at home and across the globe are eager to invest in America now that President Trump is at the helm. Yet the current regulatory
environment for our financial system inhibits investment and often punishes success. Unclear,
overly politicized, complicated, and burdensome regulations are stifling capital formation,
while American investors are flooded
with disclosures that do the opposite of helping them understand the true risks of an investment.
It is time to reset priorities and return common sense to the SEC. I'm eager to get to work for
American markets and investors. Should I be confirmed, my goal will be to ensure that the
United States is the best and most secure place in the world to do business
and for Americans to invest their hard-earned dollars to save and provide for their future.
So thank you, ladies and gentlemen, and I look forward to your questions.
Mr. Gould, you're recognized for five minutes.
Thank you, Chairman Scott, Ranking Member Warren, and members of the committee.
And thank you, Senator Crapo, for the very kind introduction. It is an honor to appear before you today
as President Trump's nominee for Comptroller of the Currency. I am grateful to the President
and to Secretary Besant for their trust and confidence. If confirmed, I look forward to
advancing the President's commitment to broad and sustained economic growth. I would like to thank my family and friends for their support throughout this process,
and I especially thank my wife, Piper, and my sons, Christopher, Timothy, and Thomas,
for their love and patience.
It is a pleasure to be back in this hearing room.
It has been 19 years since I last sat before the members of this committee.
I was counsel for then-Chairman Richard Shelby, and the committee was marking up a banking bill that would ultimately become law. My job was to
respond to any member questions about the bill's provisions or proposed amendments. I remember
distinctly the awe I felt sitting before this committee. I feel the same way today. I am here
because I believe in President Lincoln's vision of a national banking system and in the agency that has made that vision a reality over its 162-year history.
The OCC charters banks, implements the regulatory framework in which they operate, and ensures their safety and soundness all within parameters set by Congress. The national banking system is today one of the crown jewels
of American finance, but neither it nor its continued relevance should be taken
for granted. Nor should we ever forget that this system exists not for itself,
but rather to support the US economy and the financial aspirations of all of us
that constitute it, from the entrepreneur seeking to open a bank account to the large
U.S. corporation hedging its interest rate risk.
If banks are to serve their role supporting the U.S. economy, they must be allowed to
engage in prudent risk-taking.
But in the years since 2008, bank regulators have at times tried to eliminate rather than
manage risk, frustrating the ability of banks to fulfill
their function. This blinkered approach to risk management has implications for the cost and
availability of credit, the system's ability to absorb shocks, and its adoption of new technologies
and embrace of innovation. I have spent my entire professional career and half of my life studying,
implementing, or advising on financial
services regulation as a lawyer, senate staffer, consultant, and regulator. I have twice served as
a lawyer for this committee both before and after the 2008 financial crisis, including most recently
as its chief counsel under then chairman Crapo. In these roles, I assisted the committee in its important oversight of the agency I have now been nominated to lead. As the OCC's Senior Deputy Comptroller
and Chief Counsel, I served under four different agency heads, spanning the first Trump and
Biden administrations. I led the OCC's efforts to implement one of this committee's most
significant pieces of recent banking legislation, the Economic Growth Act of 2018 and the regulatory tailoring it required.
And I have been tested in crisis management, hoping to keep our financial system operating
during the COVID-19-induced shutdown of our economy.
My time in the private sector advising firms on regulation and risk management will also
be an asset to the OCC, should I be confirmed.
Seeing the real-world impact that regulations have on financial services firms of all types
and sizes is useful perspective for any would-be regulator. If confirmed to lead the OCC,
my top priorities will be ensuring national banks support our economy, depoliticizing the banking
system, improving bank supervision,
and embracing innovation within the agency
and the banking system.
I will do everything in my power
to ensure the continued relevance
of our national banking system
and its ability to support our national economy
consistent with the president's vision.
Thank you for your time today.
I look forward to answering your questions.
Please everybody follow his direction. Well done. Mr. Pettit. Thank you, Chairman Scott,
Ranking Member Warren, and the distinguished members of this committee for the opportunity
to appear before you today. I'd also like to thank all of your staff, many of which I've had
the pleasure of calling my colleagues over the past four years. And I'd like to thank Senator
Haggerty for the opportunity over the last three years to serve this body and this country.
It's a profound honor to be nominated for this position, and I'm grateful to President Trump
and Secretary Besant for the faith that they've placed in me to carry out the important duties of
this role. I would not be here today if it weren't for the support of my family, several of whom are here today.
I'm blessed to have the support of my parents, John and Andrea, and my brothers, Mark and Matthew.
From an early age, my parents' experiences instilled in me a deep appreciation
for the vast opportunities that are unique to this nation.
My mother was born in St. Kitson, Nevis, just a few miles away from where our first Treasury Secretary, Alexander Hamilton, grew up.
She emigrated to America at age 21, opening doors to opportunities that would never have been possible in any other country.
My father grew up on a turkey farm in rural Washington state,
and his father's family was able to persevere and rebuild after they lost
everything during the Great Depression in Appalachia. With this deep appreciation of the
opportunities that this country gave them, they raised three kids, all of whom who heeded the call
of public service. My own public service began at the Federal Reserve, where I worked both on
supervisory and monetary policy matters. After a brief stint in the private sector, I joined the Senate,
first as Senator Toomey's committee economist here on the banking committee,
and now as Senator Hagerty's senior policy advisor.
These experiences taught me a lesson.
Our financial system in the abstract may drive investment and economic growth,
but in the truest and most important sense,
the financial system supports the lives of all Americans and their means for pursuing the
American dream. From buying a home or starting a business to accessing credit and saving for
retirement, a stable and sound financial system ensures that every individual can build their
future and a future for their families. The Assistant Secretary of the Treasury for Financial Institutions
carries the important responsibility of promoting the strength of the financial sector
that makes all of this possible.
And this is not a responsibility that I take lightly.
This role also involves guiding Treasury's efforts in critical areas
such as financial education, community development, and cybersecurity.
As is the case in my current
role here in the Senate, it requires balancing the diverse interests of financial institutions,
both small and large, but above all, ensuring that the interests of the American people
are put first. If confirmed, I will work alongside the members of this committee to uphold the
safety and soundness of our financial institutions, and support a financial sector that fosters economic growth, freedom, and opportunity for all Americans.
Thank you once again for the privilege of appearing before you today,
and I look forward to answering your questions. Thank you.
On the roll here. Mr. Molinaro. Thank you, Mr. Chairman. That's a high standard to meet,
to less than two minutes.
Chairman.
Hard for Congress members, even harder for senators.
Indeed.
Reclaim my time, Mr. Chairman.
Chairman Scott, Ranking Member Warren, members of the committee, and Senator Britt, thank you for your kind words.
It's a true honor to be here with you today, and I'm grateful to you and your staff for the time you've extended me.
I'm honored and humbled to appear before you today as President Trump's nominee for Federal
Transit Administrator.
I'm grateful to the President for his trust in me and to Secretary Sean Duffy for his
confidence in my leadership.
I'd also like to thank each of you, Republican and Democrat, for your service to this country
and commitment to a stronger, more connected America.
Public service, as you know, has been the work of my life. I've had the privilege of serving at every level of government, local, county, state, and federal. From village mayor
to member of Congress, I've worked to build consensus, bridge divides, and deliver solutions
that matter to people. As county executive, I led through crisis and managed complex budgets and embraced
accountability, not for its own sake, but to ensure we honor the trust the taxpayers
place in each of us. I've also learned that local decision-making does indeed matter,
and one size rarely fits all. I'm joined today by my son, Jack, and wish to extend my love
and appreciation to my wife, Corinne, and our children,
Abigail, Elias, and Theo. They all sacrifice much more, as you know, than they should so that I
might serve, and I do indeed love them much. Transit is more than a system of buses, ferries,
and rails. It is the shared circulatory system of our economy. It connects rural towns and big
cities, creates opportunities,
and drives growth. It revitalizes the centers of community while giving Americans from students
to seniors, veterans, to working parents the freedom to move, thrive, and succeed.
To meet these challenges and tomorrow's demands, Transit must embrace technology,
modernize systems, and leverage investment in housing, commercial, and overall economic
development.
We must make use of data to improve reliability, enhance safety, and innovation to better serve riders and communities.
To fully realize this vision, we must drive innovation, streamline permitting, boost performance, and fully harness technology to transform how we plan, build, and operate transit.
A modern, safe, reliable, and accessible transit system in urban centers and rural communities, underground, over roads, and across waterways will advance
America and Americans. In my career, I've had the privilege of focusing on creating
opportunities for individuals with disabilities. As Dutchess County Executive, our Think Differently
initiative launched in 2015 changed how government serves people, not through rhetoric, but through action.
We made universal accessibility a core value. And if confirmed, that same commitment to those
with physical, developmental, and intellectual disabilities will shape every aspect of my work
at the FTA, and for daughters like my own, and the millions of Americans just like her.
As you know, transit depends on people. Each agency is operators, engineers, maintenance crews, dispatchers, and custodians who keep
America moving.
Their dedication deserves our respect, our investment, and a seat at the table.
I value the work of the unions that represent them and see them as partners in building
a system that is safer, more efficient, and future ready.
I wish to thank my good friend John Samuelson, the President of the Transport Workers Union
for support and for being here with me today.
I sense him looming over my right shoulder.
Let me also recognize the great professionals at the Federal Transit Administration.
Indeed, Senator Warren, their expertise and dedication are essential to this mission,
and I look forward to working alongside them to deliver results for the American people.
If confirmed, I will advance President Trump's bold America First agenda for rebuilding our
infrastructure and seek to meet Secretary Duffy's high standard for leadership, innovation
and accountability.
I will work with each of you, regardless of party, to help build transit systems that
deliver for riders, for workers, for taxpayers, and for the communities
we all serve. We are indeed at a great moment of possibility, a golden age. Together, we can ensure
that transit not only moves Americans, but helps to move America forward. And just as our own
circulatory system connects every part of the body to sustain life, transit binds our communities together, urban and
rural, coastal and heartland, ensuring opportunity access and resilience flows to every corner of
our nation. I thank you for the opportunity to appear before you today. Look forward to your
questions and with the honor of confirmation, getting to work. Thank you, Congress member.
Thank you, Congresswoman. Really well done.
Really well done. Thank you, sir. Even with the senator's interruption. Fantastic.
Thank you, sir.
Even with the Senator's interruption. Fantastic.
That counts against my time. Thank you very much.
Mr. Atkins, you just heard the Congressman talk about the golden age,
and certainly we're looking for the golden age.
The one thing I can say about the SEC is under your predecessor,
there was no golden age.
The SEC suffered a series of damaging losses as an agency.
It saw multiple rulemakings
overturned in court, had staff attorneys sanctioned for gross abuse of their power by a federal judge
in the debt box case, and experienced its highest attrition rate in over a decade. As SEC chair,
how can the SEC recover from these losses and return to its core capabilities
as an agency?
Well, thank you, Mr. Chairman.
I agree with you.
I think all those issues that you raised are very disturbing.
And I commit to get to work, if I'm confirmed, to try to make sure that we increase the morale of the agency, that we
cure some of the dysfunction that's there, the demoralization of it, and get back to work and
get back to basics, back to submission. That's very important. Shakers, I'll continue with you.
As you know, it has long been a priority of mine, this committee, and frankly the Trump administration, to end the practice of debanking.
This Congress, the Banking Committee, has focused on responding to Operation Chokepoint
2.0, where the Biden administration's financial regulators reportedly pressured banks to avoid
offering services to the crypto industry.
As SEC Chairman, will you work to ensure that everyone who wishes to play by the rules, including
those in the crypto industry, will be treated fairly?
Absolutely.
Mr. Gould, a few weeks ago, I introduced the FIRM Act, which would eliminate reputational
risk from the consideration in bank examination.
And two weeks ago, that bill passed out of this committee. Then just last week, the OCC Acting Comptroller Hood took the step to proactively remove reputational risk from the Comptroller's handbook booklets and other OCC guidance and instructed OCC examiners that they should no longer examine for reputational risk.
Do you support the Acting Comptroller's decision to remove references
to reputational risk?
I do, Senator.
Thank you, sir. If confirmed, what other steps would you take, if any, to end debanking
and more generally the politicization of federal banking agencies?
Senator, thank you very much for that question. I think it is unacceptable for banks or regulators to discriminate on
customers on the basis of the customer's politics or religion or the mere fact that they are engaged
in a lawful activity that is for whatever reason politically disfavored so i applaud the committee's
efforts to shine a spotlight on what has been going on for a while. These are issues, Senator, with which I have been working since 2018 when I was a lawyer for this committee. And I commit, Senator, to you and to
the committee to continue to support your oversight efforts as well as to use the OCC's full powers,
consistent with its statutory mission with law, to do whatever I can, if confirmed,
to shine a spotlight on these activities and ensure that they are not allowed within the
banking system. Thank you very much. One last question for you. It's a top priority for me,
this committee of the Trump administration to foster digital asset innovation so that the U.S.
can become the crypto capital of the world. In rescinding interpretive letter 1179,
become the crypto capital of the world. In rescinding Interpretive Letter 1179, Acting
Comptroller Hood took a crucial step in rolling back guidance at the OCC that limited crypto
companies' access to the U.S. banking system. Are you supportive of this effort to foster
innovation in the U.S.? And if confirmed as Comptroller, what role do you envision the
envision the OCC continuing to play in allowing digital asset innovation?
OCC continuing to play in allowing digital asset innovation?
Thank you for the question, Senator. I believe that many of these activities are clearly legally
permissible, and I would hope, if confirmed as comptroller, to engage on the hard work
of determining ways constructively in which these activities that are lawful can be done
within the system in a safe and sound fashion. I would hope that over the last four years, the agency that is the
OCC Senator has gotten some experience with respect to these assets. And so we'll be prepared
to ensure supervision in a safe and sound manner going forward. Thank you very much. Senator Warren.
Thank you, Mr. Chairman. So Mr. Atkins, you served as an SEC
Commissioner from 2002 to 2008. The lead-up to the 2008 financial crash, that
crashed the markets, cost 10 million families their homes, and cost millions
more their jobs. Your job was to spot and head off risks that were building up in financial markets,
but you showed staggeringly bad judgment. I just have a few examples since we're limited on time.
In 2004, when Lehman Brothers and Bear Stearns asked the SEC to allow them to reduce their
capital buffer by 40 percent, you said yes and voted to weaken the rules on investment banks.
In August of 2007, after what was then, quote, the worst week for the American stock market in
nearly 50 years or five years, you bragged that, quote, principles of regulatory restraint have
been affirmed as the market has continued to demonstrate a capacity to minimize and absorb systemic risk.
Worst week, and you said, great, it shows how strong we are.
And then days after Bear Stearns collapse in March of 2008, you made fun of people who thought we needed stronger financial regulations,
claiming they were, quote, wallowing in a period of irrational pessimism. And you said that, quote,
regulators must not stand in the way of investors and market participants sorting this situation
out. Yeah, it sorted itself out with the biggest crash
since the Great Depression. So simple question, Mr. Atkins, were you wrong?
Well, Senator Warren, you know, there are many, as we saw on the congressional oversight panel
for TARP, there were many causes for the problems there with that subprime mortgage crisis.
Yeah, but I'm asking about whether you were wrong about deregulation.
No, I don't believe so. I think that was not.
Well, you know, both the SEC Inspector General and the Bipartisan Financial Crisis Inquiry
Commission said that the SEC's deregulation of investment banks contributed to the crisis.
If you haven't done it yet, I recommend that you read this, Mr. Atkins. Look, this job is about
judgment. And holding up on your resume that you were one of the people on the job to exercise
judgment in the run-up to the biggest crash since the
Great Depression, and now your hindsight is not 20-20, it's 20-0. You still say that weakening
those regulations didn't have anything to do with that crash. I really hope you will read the
bipartisan analysis that says otherwise, because it's very dangerous to have you in
charge of the SEC. Now, one of my other top concerns about your nomination, Mr. Atkins,
is that your judgment will be influenced by more than an objective assessment of the data in front
of you. After your stint as an SEC commissioner, you founded a consulting firm called Potomac Global Partners. Potomac
counts every time a kind of financial firm subject to the SEC's rules among its clients,
banks, asset managers, brokers, exchanges, fintechs, and crypto companies. Your clients
pay you north of $1,200 an hour for advice on how to influence regulators like the SEC. And if you're confirmed, you will
be in a prime spot to deliver for all those clients who've been paying you millions of dollars for
years. So Mr. Atkins, given how breathtaking your financial conflicts of interest are,
I sent you a letter requesting that you commit to a higher standard of government ethics.
Slow down the
revolving door here. Several major financial regulators in the previous administration
agreed to these higher standards, but you sent me a response 10 minutes before this hearing started
saying, no, you think you've done enough. That is deeply concerning to me, but let's focus on just
getting one thing straight.
Your consulting company is estimated to be worth about $50 million.
Will you at least disclose? You've said that you will sell it if you are confirmed.
Will you disclose who the buyers are and how much they pay so that we can make certain
that these are not people who are just buying access to the future chair of the SEC?
Well, Senator Warren, I have abided by the Office of Government and Ethics.
I have a question about selling Potomac partners. It's an easy yes.
I will abide by the process.
So is that a no? You're not going to tell us who you sell it to and how much money you get
to people who will have business in front of the SEC.
You know, some people might call that a pre-bribe.
Thank you, Mr. Chairman.
Mr. Tillis.
Thank you, Mr. Chairman.
Mr. Atkins, I want to give you a chance to respond to that.
I actually think that the 2008 crisis had many root causes.
You've got a minute to explain that.
Well, thank you, Senator Tillis. You're right. Exactly. It does. And if you read these reports
that came out that Senator Warren referenced, you see the whole panoply of it. But what really
troubles me is that Congress still has yet to address the real root cause, and that was the subprime mortgage crisis caused by Fannie Mae and Freddie Mac and their activity.
And how did that happen? What was the root cause of that?
Well, they basically threw caution to the wind.
And when we talk about regulation, those two agencies really stoked the fires and then the Fed.
agencies really stoked the fires and then the Fed.
I think in some respects, we led certain consumers to the slaughter as a result of our inaction.
I'm glad to see you agree with that.
Okay, I gave you a minute.
Mr. Pettit, there are some people who have suggested that Senate Bill 2155 and regulatory
tailoring was the reason why Silicon Valley Bank failed.
I, for one, think that Senate Bill 2155 needs to be re-implemented.
I believe Silicon Valley Bank failed because they had unique activities that you can't find,
maybe with the exception of one or two banks that were doing what they were doing.
It was their risk portfolio.
Tell me a little bit about how we, and Mr. Gould, I want you to chime in after Mr. Pettit, but tell me what we should be doing with respect to
recovering from Silicon Valley Bank's failure and to what extent should we use Senate Bill 2155 to
provide the kind of relief and regulatory framework that small community banks and smaller banks need?
Mr. Gould, you can follow just after Mr. Pettit. Thank you, Senator. SVB's failure was a managerial and supervisory failure, not a
regulatory or legislative one. And I think what it should inform us is to reassess the resource
deployment that these on-site teams have been engaged in. No part of 2155 instructed SVB's
regulators to assign the highest liquidity ratings to the firm.
Do you agree with me that the examiners on that account should be fired?
It was just malpractice.
You can keep on, but I don't want you to cover that too.
Absolutely.
So they were asleep at the wheel, full stop.
And I think not only did they rate SVB's liquidity at the highest rating,
they overlooked their internal liquidity stress test failures at the firm.
Not to mention all the outstanding MRIAs and everything else that the supervisors just chose not to really press, I guess.
Yes, sir.
That's the lesson we should be taking, and we should be reassessing how these on-site teams engage in their supervision on a day-to-day basis.
Mr. Gould.
I agree with Mr. Pettit's comments.
I would note just generally, sir, and this is one
of the reasons why I think we really need to focus on improving bank supervision, is
that there seems to have just been a failure to focus on the material financial risk embedded
with that bank's balance sheet and its unique business model. I mean, this is risk management
one-on-one, and the fact that it was overlooked by both the California regulator and the San Francisco
Fed is really deeply disturbing, Senator.
I want to talk briefly with you in my time remaining having to do with reputational risk.
I was pleased to see that Acting Comptroller Hood struck all references to reputational risk from the OCC's respective handbooks on bank supervision and large bank supervision.
Will you commit that no future guidance, directives, whether formal or informal,
exist at the OCC related to reputational risk from SR 9551?
or 9551?
Yes, sir.
Yes, sir.
I think too often reputation risk is used as a pretext for other motives.
And I think the regulators have at their disposal other forms of more easily quantifiable
and just better understood, more precise, more objective terms, including litigation
terms, including litigation risk, BSA, AML compliance risk. I think it is rich to think
risk, BSA, ML compliance risk.
that some government examiner or supervisor could go into a publicly traded banking institution
and judge what they think their activities are appropriate or not appropriate based on
reputational risk. Reputational risk is foundational to an organization's reputation
and longevity. And to think that somebody from the outside should be guessing that,
it's just absurd to me. It really strikes me as somebody who's probably never worked a day in
business. So I appreciate your answer. Mr. Molinaro, I'm out of time. I just want to let
you and all of you know, I look forward to supporting your confirmations and to the two former staffers you've got a big fan club here on Capitol Hill.
Thank you. I ask unanimous consent to enter into the record letters from Mr. Atkins regarding his
compliance with all necessary ethics requirements. Without objection, so ordered. Senator Van Hollen.
Without objection, so ordered.
Senator Van Hollen.
Thank you, Mr. Chairman, and welcome everybody.
Mr. Atkins, a number of years ago, Senator Kennedy and I teamed up to pass a law entitled
Holding Foreign Companies Accountable Act.
It was designed to protect American investors and actually also American businesses by ensuring
that foreign companies that list their shares on U.S. exchanges have to play by the same
accounting standards as U.S. companies that list their shares on those exchanges.
And at the time, Chinese companies had been playing by a whole different set of rules, which both put them at a competitive advantage,
but also endangered American investors on those exchanges, especially less sophisticated investors.
And the entity that is charged with making sure that Chinese companies play by the same rules, that they
comply with American standards, is the Public Company Accounting Oversight Board, the PCAOB.
So my question to you is, do you commit that if you're confirmed,
you will preserve the PCAOB's important role in that mission?
Well, thank you, Senator. The role is crucial. Accounting and auditing is really crucial, obviously,
to investor protection and to the capital market. So yes, that function is by law delegated to the
PCAOB. And so I'm going to ensure that it is not politicized anymore and that it really focuses on its mission to protect investors and to follow those rules.
I appreciate that because the reason I ask is I've been looking at Project 2025,
and I see that you have a special mention in Project 2025 on a chapter that mentions the PCAOB.
Is that right?
I participated in a couple of phone calls, but I didn't.
Well, they listed you with a special mention in a chapter that recommends that the PCAOB be abolished.
Are you in favor of abolishing the PCAOB be abolished. Are you in favor of abolishing the PCAOB?
Well, that's up to you all.
It's part of the statute,
and actually it's not even part of the securities.
Are you in favor of abolishing the PCAOB?
The function needs to be done
by whether it's PCAOB
or whether it's folded back into the SEC.
The function is vital and how best and most efficient it is achieved.
So do you or do you not subscribe to the recommendation in this chapter of Project 2025
that the PCOB be abolished?
Well, it's not in my power. It's up to you all. So, I mean, I would support whatever Congress.
So you do agree that neither you nor the president has the ability to unilaterally abolish the PCOB.
Do you agree with that?
I'm not a constitutional lawyer.
Well, you just said it was the Congress, right?
So I'm assuming from your answer that you agree that the president cannot unilaterally get rid of the PCOB. Is that your
deal? It's part of it. You have it in the statute. So it's part of the law. That seems to be a
there are lots of things that are in statute right now, Mr. Adkins, that the president has
decided to ignore, which is why we have so many lawsuits filed about his abuse of the separation of
powers. Mr. Molinaro, if you're confirmed, you'll be leading an agency that has about
700 employees at the beginning of President Trump's second term. But because of the actions taken by the Musk, Doge operations and others, about 80 probationary employees
were initially terminated. My understanding is many of them are now being brought back
to the FTA because of court orders that found that those were illegal firings.
Is that your understanding that many of them are coming back now?
Only through public reports, Senator. Got it. And
would you agree that haphazardly eliminating employees from the FTA, so for example,
those in the Office of Transit Safety and Oversight, could put people at risk? I think,
Senator, I can only offer what I've observed publicly. It's my expectation to enter the role with this force, obviously seeking to increase morale.
But I assure you, Justice Secretary Duffy asserted in his hearing, and I did earlier in my opening comments,
public safety, not only the safety of the individual riders across America, workers in the systems is a priority,
America workers in the systems is a priority, and I'll seek to apply the law.
and I'll seek to apply the law.
I appreciate that because the infrastructure bill that passed, including a measure that
I had introduced, the Transit Worker and Pedestrian Protection Act, so I look forward to working
with you if you're confirmed.
Thank you very much.
Look forward to the same, Senator.
Senator Kennedy, you are recognized.
Mr. Atkins, you were roommates with Senator Hagerty in law school? Yes, sir.
Is it true that Hagerty has a tattoo of the Backstreet Boys on his lower back?
I wouldn't know. I don't know.
I wouldn't know.
I don't know.
Mr. Haggerty, you know who Sam Bankman Freed is, don't you?
Or Mr. Atkinson?
Yes.
He looks like the fourth runner-up in a John Belushi lookalike contest, doesn't he?
That could be. He's aike contest, doesn't he? That could be.
He's a crook, isn't he?
He's convicted and, yes, in jail.
And his parents were involved in his company, weren't they?
I guess, by public reports.
Don't you think the SEC ought to do something about it?
Well, I look forward to getting to the SEC to find out
what has happened. But based on what you've read, they made millions of dollars off of
their son's illegal activity. Don't you think they ought to be punished? Don't you think the
American people have seen that and wondered if there are two sets of standards? Well, like you,
that and wonder if there are two sets of standards? Well, like you, I'm concerned about
those reports. I want you to be more than concerned. Well, I need to find out. And when
his parents did all this, they were both chaired professors at Stanford Law School, weren't they?
Apparently, yes. Yeah. Has the SEC been investigating Stanford Law School for its involvement in this?
Yeah, I would know.
Didn't Sam Bankman, for each parents who were involved in the fraud,
make sizable donations to Stanford University?
Perhaps.
You don't know?
I don't know, personally.
Did Stanford give the money back?
I would know that.
Well, Mr. Atkins, I want you to find out.
And there shouldn't be two standards of law and punishment for people in America.
And every time you come to this committee, I'm going to pounce on you like a ninja to find out what the SEC has done.
Because I don't think the SEC has done, because I don't
think the SEC has done a damn thing.
And I read in the paper where the bankman frees all of them trying to get a pardon.
They're crooks.
And I expect the SEC to do something about it.
And I expect the SEC to do something about it.
If I'm the CEO of an American company,
and I want to sell some of my company's stocks,
I've got to file an electronic report with the SEC
that becomes public immediately,
and then I've got to wait two days, don't I?
Yes.
If I'm the CEO of a Chinese company that's listed on an American exchange, I don't have
to do that, do I?
Yeah, there are different rules for foreign.
Why?
Good question.
Things have changed a lot since those rules were put in place.
Now, Senator Van Hollen and I have a bill.
I begged Mr. Gensler to do something about it.
I want something done about it.
If I'm the CEO of a Chinese company
and I want to engage in insider trading,
I have to notify the SEC,
but there's no time limit,
and I don't have to file electronically. I can send notify the SEC, but there's no time limit. And I don't have to file electronically.
I can send them a letter, and I don't have to wait.
And CEOs of Chinese companies have done that, haven't they?
I want you to find out.
I expect you to find out.
out. That's the second thing I'm going to pounce on you like a ninja on. A bunch of these CEOs
That's the second thing I'm going to pounce on you like a ninja on.
of Chinese companies listed on American exchanges have sold their stock, and the stock immediately
went down, and the American investors had to bear the losses. $10 billion worth under the SEC's nose.
dollars worth under the SEC's nose. I expect something to be done about it.
Mr. Pettit, I understand where the President's coming from on tariffs, don't you?
Yes, Senator.
America is the wealthiest country in all of human history. 70% of our economy is driven by consumer demand, consumer purchases.
So why not use our bargaining strength, our economy,
to get foreign companies to build their plants in Louisiana?
I get that.
In the long run, theoretically, it'll work.
Somebody once said, in the long run, you're dead, though, aren't you?
Yes, sir.
Tell me what the short-term effects of these tariffs are.
Already consumer expectations are going down
like John Goodman on a seesaw.
Can you tell me what the short-term effects will be?
I'm over.
Can you answer?
Ten seconds.
Pretty please, sugar on top?
If confirmed, I look forward to working with the.
Answer my question.
It's difficult to assess the near-term impacts of the tariffs, but in the long run.
I know it's hard.
That's why I'm asking you.
You're an economist.
Senator, your time is up.
Damn, I had him nailed down.
He was wiggling, however.
So Senator Cortez messed up.
I'm happy to follow through in your train of thought there, Senator Kenney, because that was my question.
Bipartisanship.
Mr. Pettit, talk to me about these tariffs.
You know, we have currently imposed tariffs on Canada.
What's the short-term impact?
Thank you, Senator.
The impact of tariffs in the short run may increase the prices of the imported goods, but the objective of these tariffs in the long run is to help incentivize more manufacturing here in the United States.
And if they impose more costs here for our companies and companies pass that cost on to the consumers, which I have seen publicly
they intend to do, is that higher cost for American consumer, higher prices.
In the short term, they could lead to higher prices on imported goods.
So you would agree with Canada's billboards that are in Nevada and across the country
now that say tariffs are a tax on your grocery bill in the short term?
I'm not sure of the volume of imports of various
produce and goods, but I would say that the intent of these tariffs is to help reshore.
I know the intent. Let's talk about the short-term impacts. Would you agree, along with Canada,
who has a billboard now in Nevada, tariffs are a tax on hardworking Americans? You just basically
said that's the ultimate result. Would you agree?
I believe the effect of tariffs is very different than a tax on Americans, but it could lead to higher prices on certain imported goods here in the United States.
To Americans?
Yes, ma'am.
If the companies pass the cost on to the Americans?
Yes.
Okay. Thank you. Let me ask you this. If you're confirmed as Assistant Secretary of the Treasury,
will you respect the independence
of the bank regulators?
Thank you for the question.
If confirmed, I look forward to working with the regulators who do operate independently,
yes.
And you will respect their independence?
I will.
Okay.
So explain to me if you can, because Secretary Besson has announced, and I think it was March
6 in a speech, he stated something to the effect of
our financial regulators singing in unison from the same song sheet is what he is looking for.
We need our financial regulators singing in unison from the same song sheet. To be clear,
it does not mean consolidation of agencies, but coordination via treasury, such that our
regulators work in parallel with each other
and the industry. What does that mean? Thank you, Senator. I believe, and not to speak on behalf
of Secretary Besson, the intention of that statement was that we need to avoid the outcome
of having regulators telling institutions different things so that institutions that
are supervised by multiple federal regulators aren't torn between conflicting guidance.
So regulators should work in conjunction and parallel with the Treasury Department?
No, I think the objective here is to ensure that there is an uncertainty in terms of which rules to follow across different agencies.
Okay. I'll be curious to see how this plays out.
Mr. Molinaro, thanks for meeting with me.
I really appreciate the
conversation that we had in my office. One of the things we talked about was transparency,
and you called out your own metropolitan transit agency on a lack of transparency and accountability.
Can you promise that as an administrator, you will provide the public and Congress
transparency in job firings and federal funding
freezes that are currently being ordered by the Trump administration and those employed with Doge.
Senator, I was nearly convinced none of you noticed I was here.
Obviously, Senator, I don't know the current impacts. My expectation and my commitment is
to uphold the highest standard of accountability and
transparency and to work with your offices, certainly to explain both impacts of previous
and future decisions within the FDA.
I appreciate that.
Let me ask you this.
Congress previously worked deliberately in a bipartisan way to pass the Infrastructure
Investment and Jobs Act.
And the bill authorized up to $108 billion for fiscal years 2022 and 2026 to support public
transit. Will you commit to dispersing all of the already approved funding and the remaining funding
consistent with how it was authorized by Congress? Senator, and again, I do appreciate the time we spent together.
I don't know the status of awarded and contracted grants.
I did read, I think yesterday morning,
that there is now some advancement and release of those dollars.
As you know, and I said to you, and privately, we'll say publicly,
the president and the secretary have asked me to advocate
on behalf of transit systems across this country and the riding public.
And so my expectation is to advocate for the disbursement of contracted
and obligated awards. Thank you. And then finally, let me just ask you this. We talked a little bit
about this rural communities and the challenges that we see for transportation in rural communities.
I know your house district covered vast counties in upstate New York, where my husband and his family are from, and you're familiar with the lack of transit access.
Can you talk a little bit about not only the challenges you saw, but how you addressed it
and what you intend to do? In 10 seconds, I will tell you, I value working with supporting rural
and regional transit systems. Think of hubs and spokes, urban and village and
city centers being the hub, those regional rural districts, rural transit systems being the spokes.
It's important we connect them to move Americans and to grow the American economy.
Thank you. Thank you, Mr. Chairman. Yes, ma'am. Senator Moreno. Thank you, Mr. Chairman,
and thank you to all of you for stepping up and you're willing to serve the country. It's very,
thank you to all of you for stepping up and you're willing to serve the country. It's very,
very appreciated. I'll start with you, Mr. Atkins. Man, you just have to be able to breathe
and not be a complete raging lunatic, and you're going to be the greatest SEC commissioner compared
to the last guy. I mean, congratulations on coming after Gary Gensler, who objectively probably was
one of the stupidest people in government. I want to ask you a question because there were some comments about,
that I want to correct for the record, around, you've met President Trump, right?
You've had a chance to interact with him?
Yes, Senator.
Is he the President of the United States?
Yes.
Is he in charge?
Yes.
Is there a co-president?
Or does President Trump make the decisions?
He's the President, the head of the executive branch. Right. So there's no ambiguity in the White House as to who's in charge.
It's Donald J. Trump, correct?
I hope so.
There's no ambiguity.
I just find it ironic that my Democrat colleagues like to say this whole talking point of Elon Musk.
I thought you guys loved Elon.
70% of EVs are sold by Tesla.
What a terrible breakup between the left and Elon Musk.
I mean, I'm convinced Taylor Swift is going to write a song about this someday.
But here's my question to you.
Who was in charge for the last four years?
Who was in charge of the last four years when we had no idea who had completely, clearly
incompetent person was in
the White House. It seems like the most important person in the White House was an auto pen.
But moving beyond that, let's talk about the SEC for a second. Are you worried about what's going
on with American companies having capital outflows to the Chinese-backed companies like Corporate Amperec
Technology Limited, a company that sounds very nice and obscure and Western, and in reality,
it's a fully-owned company for the CCP. Are you concerned by that?
Well, Senator, I'm concerned about what I've read in the paper. Obviously, I'm not in the
building yet and know what the sec is is seeing
and doing about it but i know that uh obviously the work that you all are doing in congress i
think is very important to it well i i don't uh pretend to uh jump on you like a ninja but if you
could uh please take a look at uh making certain that you look at what we're doing to make certain
that u.s capital outflows don't go into that office.
Shifting over to you, Mr. Mullen, I do not want you to feel ignored at all.
So let's talk transit for a second.
Do you think it makes a lot of sense to spend two, three times as much money for electric buses than for ones that are run by, for example, renewable or compressed natural gas?
I appreciate the question, Senator. As I said in my opening comments and affirmed when I spoke
with your staff, I do think that local and regional transit systems need to make purchasing
decisions that make sense for them. And while I embrace all of the above energy approach,
you're highlighting renewable energy sources are, in fact, a great way, as I mentioned in addressing the previous senator's question, of marrying the agricultural and rural economy with mass transit.
And so while currently the law requires a certain distribution, if you will, of dollars for low and no emission vehicles, you all will debate and consider that through reauthorization.
Our job, I think, is to really encourage local and regional transit systems
to make the purchasing decisions that make sense for them.
Well, again, they certainly can make their own purchasing decisions,
but not when they're billing the federal government two or three times
what they can do with something else that certainly accomplishes the mission better.
I've seen with my own eyes trucking companies that put diesel generators to charge electric
semis.
It seems peak stupidity.
Mr. Penn, I'll move to you quickly because the chairman will electrocute me if I go over
my time, and I don't want to be electrocuted.
So let me ask you a question.
We talked about tariffs, which is funny because I thought this was the banking committee,
not the finance committee.
But let me just clarify for a second on the uh situation
in canada uh you you uh have a family and uh you you have family members do you know anybody who's
uh ever been killed as a result of fentanyl poisoning not directly but i have friends of
friends who have been impacted by it yeah it's a life sentence yes sir do you think that the
president of the united States should do nothing?
Like we should just continue to let 110,000 plus Americans die every single year of fentanyl
poisoning?
I do not.
Do you think it's acceptable that Canada and Mexico allow that poison to come into this
country?
No, sir.
So again, for four years, we did nothing.
Actually, before that, for decades, we did nothing.
And President Trump is simply saying
to our partners, hey, we'll let you rip us off for $300 billion a year in a trade surplus,
but please don't poison 110,000 Americans. I don't think that's an unreasonable expectation.
And I think when we look about tariffs, and it just shocks me that we sit here and have these
conversations that don't take into account the empathy of what's going on in places like Ohio
that's been ravaged by fentanyl.
Thank you, Mr. Chairman.
Senator Reid, thank you for your patience.
Thank you very much, Mr. Chairman and gentlemen.
Welcome.
And Mr. Gould, the LCC is charged with the enforcement of the Military Lending Act on federally chartered banks.
of course, with the Military Lending Act on federally chartered banks.
And will you commit to vigorous enforcement of this legislation,
which protects our servicemen and women?
Yes, sir.
Thank you very much.
As you know, the MLA bars lenders from charging servicemen
is in excess of 36% interest.
And I feel that's a good standard,
not just for members in uniform, but for every
American. And in fact, as I understand, the OCC's supervisions insist that interest rates not go
beyond 36% because doing so would be indicative of poor lending standards. Is that accurate?
Senator, I'd be happy to look into that if I am confirming to get into the OCC.
Well, if that in fact is correct, then I would hope you could join me in urging that
we apply that military standard to all the American people and that we pass legislation
with this body in the House to make 36% interest rate of cap on all lenders.
But I will look forward to working with you on that.
Mr. Atkins, private equity is growing exponentially.
It's also becoming more widely available, not just to wealthy individuals, but to retail investors alike.
widely available, not just to wealthy individuals, but to retail investors alike. In fact, the SEC
just approved a exchange-traded fund containing private credit assets. So there is a possibility
that very risky or illiquid assets are now being included for sale to retail consumers.
It raises the question of what transparency
and investor protection should be in place
for private equity or private market investments.
Well, thank you, Senator.
It was a pleasure to chat with you in your office
here a few weeks ago.
Well, the one thing about the public markets and ETFs and mutual funds is that they have to abide by diversification rules and those sorts of things,
which is a key investor protection device for those sorts of things with diversity in there so that one bet
or one investment will take the whole thing down.
So I think that's key and there's a whole process
by which the SEC and the staff approves
these various offerings.
And so I look forward to seeing what's working
the SEC once I, if confirmed, and get there.
Just now, these private equity, private investment funds are growing.
They're larger than some of the publicly capitalized companies
that are regulated very rigorously by the SEC.
And I think we're approaching a point where we have to have
some regulation of these private equity enterprises, because if not,
we could find ourselves in a situation where the public is buying illiquid assets or
I saw this as we went through the 2008 crisis, not with respect to
investments, but respect to housing. But let me move on, Ms. Atkins.
Currently, the SEC has a pending case against Elon Musk
for concealing his intentions while acquiring Twitter stock.
And one outside commenter said, quote,
a very serious securities violation
and seemed to have saved Musk about $143 million.
Mr. Musk is also the head of Doge, as we know, which has been borrowing into agencies
and disrupting agencies.
Given that the SEC is currently using its resources to enforce a law against Mr. Musk,
What would you do if the dose team showed up and Mr. Musk came knocking on your door?
what would you do if the Doge team showed up and Mr. Musk came knocking on your door?
Well, I don't know anything about the case other than what I've read in the paper, so obviously I can't speak to that.
But, you know, as far as, you know, if there are people who can help with creating efficiencies in an agency or otherwise, you know, I would definitely work with them.
And as we'll be looking at things going on at the commission right now to make sure that
taxpayer funds are being used properly and that the work of the commission is being done
effectively and efficiently.
Would it be a surprise if the case against Mr. Moss was suddenly dropped?
I have no way to judge what the merits or lack thereof might be on that.
Thank you. And Mr. Montalara, thank you for meeting in my office. My time's expired. Good luck.
Thanks, Senator. Senator Britt.
Thank you, Mr. Chairman.
Thank you all for your willingness to be here and your willingness to serve our country
at the highest level.
You all are up for very critical roles that affect the lives of all Americans, which is
why it's very important that you all bring transparency and accountability to the agencies
that you are going to serve.
I'm not going to ask you all to comment on the past, but I do want to highlight a couple of the needs of change here. Over the last few
years, we've had agencies that prioritized speedy regulation over thoughtful policymaking, rushing
into policymaking without proper due diligence or justification. In fact, we had regulators sit in
this room and our other committee hearing room in front of us and one by one tell me that they believe the U.S. banking sector was the strongest and well capitalized across the world.
I agree.
However, immediately, you know, calling for higher and more regulation and higher capital standards right after that.
I mean, I literally asked them after the 2023 banking
failures, I said, did you use every tool in your toolbox to prevent this? Every single one of them
walked down and said, I don't know. I don't know. I don't know. I'll get back to you. But then in
quick response after that, they all said they needed more power and more authority to prevent
that in the future. That is absolutely not how this should work and it's completely and totally unacceptable. One of the things we also must reinstate is proper regulatory tailoring.
So I was able to sit down with Senator Grapo right after these failures and ask him about 2155.
My first question is for you, Mr. Gude, former staffer to former staffer. Can you speak to the
purpose of 2155 and how a balanced regulatory framework
actually promotes stability and growth? Because it is my belief, whether it's capital, liquidity,
operational risk management, an Alabama bank with less than a billion dollars in assets should not
be subject to the same threshold as a $3 trillion bank. And I'd probably say the same for $150
billion bank. And I think there's purposeness in this, and I'd like to hear your thoughts.
Well, thank you very much for the question.
It is certainly the case that not all banks' business models look the same or have the same risks.
And as a result, they should not be treated the same way, whether as a matter of regulation or as a matter of supervision.
want to preserve a diverse banking sector, which is to say a sector in which we have banks that are
smallest banks, community banks serving their local communities to the largest of banks and
everything in between, Senator. We need to ensure that we, the regulators, and if confirmed would
be the comptroller, adhere to both the letter of the Economic Growth Act as well as the spirit of it in making sure that we
are bringing common sense tailoring to both bank supervision and bank regulation. Thank you for
that commitment. Also in the rulemaking that we've seen over the last couple of years, it created
significant confusion and compliance costs to some of our smallest banks, our community banks,
and our businesses in rural America and our main streets that make our states so great.
Mr. Pettit, this question is for you.
In your role of overseeing bank policy, will you commit to regular communication with community
bank sector to ensure that the rules that are going to be considered are taking a look
at their unique business model?
What is the cumulative impact
of these things? What is the actual enforcement mechanism? What is this going to cost? How is
this going to affect them and their relationship banking? Will you commit to looking at that before
moving forward? Yes, Senator, if confirmed, I've seen firsthand the role that community banks play
in adding to the breadth of our banking system that reach areas in states like Tennessee and Alabama that would be otherwise unbanked. So I look forward to working with them if confirmed.
Thank you, Mr. Pettit. I only have a minute left and I have two more questions.
Shifting gears, I want to touch on the SEC Consolidated Audit Trail, or CAT. The massive
data collection poses serious security and privacy risk for consumers. I am pleased that the agency has recently halted the CAT collection of certain personal
identifiable information.
However, I still have concerns that the data that's already been collected and stored within
CAT creates a target for bad actors.
Mr. Adkins, will you commit to reevaluating both the necessity of CAT and whether adequate
protections are in place to safeguard that data
that has already been collected. Absolutely. Thank you so much. I look forward to your
leadership on that. And Congressman Molinaro, I see your former colleagues flooding in from the back.
You have just immense support from both sides of the aisle and everyone who's had an opportunity
to work with you. I am excited for your leadership in this new role. When you said we want to help America move
forward, I couldn't agree more. One of the things we see in Alabama is having many rural communities.
Sometimes that takes extra effort and extra thought. Do you have anything you want to add
or talk about with regards to how we incorporate rural communities into your plans? Sure. Critically
important. Obviously, many of your constituents need to move within their
communities but to other communities for employment. I think the FTA can lean in with technical
support working with regional and smaller transit agencies to provide back office support
really to grow their capacity. But we look forward to getting on the ground working with
you, your staff and local officials to assist in meeting the needs of rural communities. Thank you so much. Thank you all.
Senator Smith. Thank you, Chair Scott and Ranking Member. Welcome to all of you. Thank you for
being here. I will actually follow up on the question that my colleague, Senator Britt,
just asked about rural transit. Congressman Molinaro, you and I spoke about this just yesterday afternoon. So I appreciate that question. So the FTA is going to be responsible,
is responsible for lots of grants and projects that are already in the pipeline. Things are
already happening and contractors have ordered materials, construction is in process. We've
got engineers and electricians and the whole nine yards showing up to work.
And my question is, you know, concern about what the administration has been doing to pause or halt or sometimes cancel projects,
even projects that are across all other agencies that are already in process.
So can you just talk about how you would approach this leading FTA?
how you would approach this leading FTA, and are you able to commit that the funds that we
authorized through IA, the Infrastructure and Jobs Act, pardon me, that those projects will
keep moving and the funds keep flowing? First, Senator, thank you for the time yesterday,
and I hope, I think it was Graham, I hope Graham had a whirlwind of a day shadowing you. As I said
yesterday, I don't know the status of the individual grants, but it
is my commitment as the president has asked and Secretary Duffy expects. I will continue to
advocate for the release of dollars and certainly meeting the contractual obligations of the FTA.
As I noted a few moments ago, I read yesterday, and this is the only information I have,
public notice that some of those grant projects are now moving forward.
I believe congressionally directed dollars are starting to flow.
And so my commitment to you is to work with you and your team to advocate for and hopefully move effectively those dollars.
And I would offer, I'm sorry, it is critically important and I understand the reality that in order to move massive infrastructure projects and even small transit
projects, that commitment from appropriation to ultimate obligation and contract is important to
adhere to. That's right. I think that's important. And of course, at the end of the day, if you have
small rural transit agencies that are in the midst of a project and then that project gets held up
because the federal government isn't living up to its commitments, then that's just money out of the pockets of my constituents who
are going to have to figure out how to cover the costs other ways. And for Minnesota, of course,
we send more money to the federal government than we get back. So this is a matter of great interest.
Appreciate the conversation we had yesterday. Mr. Atkins, I want to talk to you about private funds.
There's growing evidence that private fund managers are taking advantage of their unregulated, unregistered status,
pardon me, unregistered status. 2022, the SEC warned that managers are not disclosing
the full fees and expenses that their investors are paying and are using cherry-picked track
records to artificially inflate their fund's performance. And in December, the Wall Street Journal reported that private markets,
as a quote, come at the cost of higher fees, greater risk, more conflicts of interest,
and less disclosure. And that matters because it means that workers' pension plans or retirement
accounts get saddled with those higher fees. So Mr. Atkins, do you agree that private fund
managers are charging higher fees and expenses to their investors than their public market counterparts?
Well, Senator, there's a whole range of fees that are done.
But I would, to your point there, as far as, you know, the not being truthful in disclosure, 10B applies to whether or's public or private security. So that, I think,
is one way to protect investors if there be any bad disclosure in that way.
So you're saying that investors should be protected by making sure that they know what those fees are going to be in advance? Well, these are accredited investors and people who are
not retail investors, and so they have the means to do investigation. But if the disclosures are
incorrect or materially incorrect, then that's actionable.
So the typical management fee for a private fund can be four times higher than the annual fee for a mutual fund.
And that doesn't even include the profits, of course, that those fund managers keep for themselves, which can push up to 20%.
And multiple studies have found that private funds rarely, barely, I should say,
beat the stock market if they do at all. Do you think that private fund managers, I mean,
what's your take on what we ought to be doing to make sure that this is fair for people?
Well, I think people who are investing in these sorts of funds are more sophisticated in general than others,
or they have the ability to hire advisors.
So they don't need to pay.
There's other alternatives.
You don't necessarily need to invest in those types of instruments.
I think this is a matter of concern, and I think that as these funds become, you know, it's the pensions of my constituents that are in these funds, and it's not a good thing.
I'm happy to work with you on that.
Senator Warnock.
Thank you, Brother Chairman.
To the nominees, welcome to all of you and your families present, and congratulations on your nominations.
to all of you and your families present, and congratulations on your nominations.
Mr. Atkins, thank you for meeting with me a while ago in my office.
And I'd like to follow up on our discussion, specifically regarding the 2008 financial crisis,
which devastated millions of Americans.
Millions of Americans, as you know, lost their jobs. Families lost their homes.
Seniors lost their retirement savings.
And instead of families getting the help they needed, Americans saw Wall Street.
You served as a commissioner on the Securities and Exchange Commission under President Bush during the lead up to the crisis from 2002 to 2008.
Correct? Yes, sir. President Bush, during the lead up to the crisis from 2002 to 2008, correct?
Yes, sir.
In 2009, you were appointed to serve on the Congressional Oversight Panel for TARP, Troubled Asset Relief Program, which ranking member Warren chaired and which oversaw the federal
government's response to the financial crisis.
When we met a few weeks ago in my office, one of the questions you might recall that I asked,
based on your experience, what did you learn from the financial crisis?
And you spoke in your answer about the overregulation of banks and the financial sector.
Can you share more on that view?
Well, thank you, Senator. Well, there are many causes to that financial crisis, and obviously
it was really awful. But what troubles me is that some of the key factors to it are still
unaddressed, and that is the Fannie Mae and Freddie Mac's activities in the marketplace and how that can, you know, potentially create problems in the future, similar to what went on 20 years ago, 25 years ago.
As far as, you know, what the SEC is doing, I look forward to being in the building to figure out, you know, what the examinations show with respect to the.
What do you think was the big takeaway?
From.
In terms of lessons learned from the crisis.
Well, I think that, well, one is over leveraging is obviously not a good sound business practice. And I think because of, frankly, because of a lot of the distractions that went on during
that time from the leadership at the SEC, from the chairman and others, rulemaking that
were not central to the situation at the time, I think that helped to create distraction. So one of the things that struck me by your answer in my office, and you seem to be elaborating
on that as you talk about distractions, was that you felt that when I asked you, what
When I asked you, what was the big takeaway?
was the big takeaway?
You said overregulation.
Is that an accurate characterization of your view that the big problem was overregulation that led to the 2008 financial crisis?
I didn't know about overregulation.
I don't recall saying that.
But I think misregulation.
I think focusing on the wrong things was what helped to create that crisis, being distracted by ancillary issues and not focused on what's really important to the marketplace.
Do you think less regulation would have helped?
I think it was misregulation, frankly, wasted resources and not focused on the actual problems that were there.
So do you think that we were too hard on the banks?
Well, banks or securities firms, I think, again, the distortions that were created through the regulatory scheme at the time helped to distract the examples.
So in some ways, we were too hard on the banks.
No, I don't know about too hard, but just, again, focus.
I'm asking because, you know, there are communities in Atlanta, especially communities that I'm close to and folks that I know and people in my church that still haven't recovered.
I mean, we saw a huge transfer of wealth as a result of this crisis.
The banks got bailed out. Wall Street got bailed out.
But consumers didn't get bailed out.
And I'm asking because you're the nominee at the SEC,
and I'm just trying to get an understanding of what you think we need to do differently.
Let me press on. Speaking of going easy on Wall Street, you've previously been critical of monetary fines against companies charged with fraud.
If confirmed, will the SEC continue to fine companies that break the law?
Absolutely, but it obviously depends on the
situation. And when I was there, the commission adopted a bipartisan statement on corporate
penalties. Do you have an issue with penalties as a way of making sure that they comply with the law?
No. Okay. Thank you so much. Thank you. Senator Kim.
Thank you, Chair. Mr. Atkins, I wanted to just start with you. I know that there was mentioned earlier about the consolidated audit trail.
I guess I just wanted to ask you, do you agree that the prospects of foreign companies manipulating our market presents a national security threat?
Yes, and especially in a day of AI and everything else.
So I think hopefully all of us can agree upon that.
So I guess I wanted to ask, you know, the consolidated audit trail, CAT,
it's really our only tool that tracks market manipulation across companies,
particularly in foreign companies.
What is your thoughts on whether or not we should continue on with CAT? that tracks market manipulation across companies, particularly in foreign companies.
What is your thoughts on whether or not we should continue on with CAD?
Well, so the Consolidator,
I look forward to looking into what the status
of that whole situation is.
It's obviously cost a lot of money and a lot of effort,
both by the SEC, but then also with
respect to market participants. So is it well coordinated and well calibrated to
meet the needs that it's stated to hopefully meet? So I think it needs to be reviewed.
So you don't have a position right now that it should be taken away?
No, I need to look at what the status is.
I only know what I read in the newspaper.
But to see, FINRA is obviously involved in that, the SEC, and then the exchanges.
A lot of people have spent a lot of money.
I hope it's towards a good end,
but that's what I intend to find out should I be confirmed.
Well, look, the reason why I raise this
is because I know you were listed as a special contributor
to that portion of the Project 2025 compilation there,
which explicitly calls for the termination
of the consolidated audit trail
program. So I guess I just wanted your response. Did you then disagree with what you saw
in Project 2025 talking about this? Well, actually, I participated in a call or two on that. So I
wasn't involved with drafting. But so again, I commit to looking at the situation the way it is now,
what the plans are, how efficient it is, what the costs are going to be. They've ballooned a lot
from what it started out. And even the mission of it has kind of veered off from the way it was
stated from the folks who voted on it back originally. So I think we, like with anything else,
things change over time.
And I think we need to look to see
if it's going to be focused on the mission
that it's trying to solve.
Well, that's a helpful clarification
because I wanted to get it since I was concerned
because it just seemed like,
look, this is an important tool.
It's important for us to be able to fight back
against that type of manipulation that could occur when it comes to our markets something that we've seen
and what we see sort of a rise of you know greater global competition whether you know concerns about
chinese companies or others trying to manipulate um so please you know that is something that i i
urge you if if you're confirmed uh to prioritize and to to do everything we can to make sure that these tools
are in place. And I personally think that the CAT program has been helpful, is important,
and is really our only tool when it comes to this. So I just wanted to emphasize that in particular.
Mr. Molinaro, I just wanted to be able to turn to you. Just be able to ask, when it comes to
the FTA, just what your thoughts are in terms of how we consider adequately staffing that
at a time when we've seen efforts across this administration to be able to decrease staff.
In particular, I was very concerned about just the lack of protections for probationary employees
in terms of how they were
terminated at FTA. I'd like your response to that. Sure. As I mentioned earlier, and I appreciate the
question very much, and our time together, I do want you to know I spent some time talking with
Chris Colori at New Jersey Transit. I don't know the status of those hiring and dismissal decisions.
I only know what I've read. Having spent most of
my life in local government, I can tell you on any given day, I would wake up and the federal
or state government would impose a mandate that would require us to do more with less.
My goal is to show respect to the career staff. I have a great deal of appreciation and admiration
for them, assess the impact of those decisions, and to really demand and to work with
the team to deliver the highest results with the team that's been presented to me. Well, as we
talked about when we had a chance, I mean, you know, right now, I think there's no one in this
country that thinks that what we're doing on transit is enough. You know, there's more that
we need to continue to push on. And for us to be able to meet that moment and supercharge this,
I really think that we need to understand and be willing to take those types of investments. You and I talked about it as a
national priority, and I think we should prioritize that expertise that can be brought by some of
these public servants. We share that interest, Senator. I'll yield back. Thank you, sir. Senator
Blunt-Rochester. Thank you, Mr. Chairman and Ranking Member Warren. I want to start off by saying that for the nominees that are before us, your responsibilities are pivotal, not just for our country, but for the world. unfortunate that you did not each get the requisite time that was commensurate with how
important your positions are. I will ask you some questions for the record so that you are not all
left out. But right now, I want to focus my questions on you, Mr. Atkins. I'm deeply concerned about your record. And even in the course of this hearing,
when asked about why the financial crisis happened, I have here SEC distractions.
I have ancillary issues. Instead of the question when it was posed to you, was there overregulation?
You said misregulation. You mentioned Fannie and
Freddie. Was there anything that you got wrong? Well, Senator, you know, I was one of five
commissioners and obviously I was not in charge. And, you know, during that time, you know, there
were things that I disagreed with, which I, when I was talking about distractions, I really believe
that some of the things that then chairman was pushing and that he had a majority on,
I do think that it distracted the staff from focusing on the real problems of over-leveraging
in the securities industry, which, you know, contributed to Bear Stearns' issue.
And then the underlying issues of Fannie and Freddie where the securitization of subprime mortgages
and the distortions that that did to the marketplace
were really critical.
And the Congressional Oversight Panel for the Party
But was there anything that you got wrong
when you look back?
Is there something you would have done differently?
Well, I think as far as looking at, you know, the overleveraging and what the staff did or did not do.
And I think that that's one thing that I believe the SEC, you know, should have been, you know, more on top of.
Did you vote for the Consolidated Supervised Entity Program?
I did.
It was a unanimous vote by the commission.
But I did ask the crucial question, do you, the staff, have enough resources to effectively
take on that burden?
And I was assured by the staff and the chairman, yes.
And I think that was part
of the problem. I think looking back, we know that this allowed the five large investment banks to
extremely leverage positions in mortgage-backed securities that ultimately failed and bankrupted
or seriously destabilized those firms. And the SEC's inspector general determined that this program and the poor
oversight of these banks by the SEC contributed to the crisis. And as Senator Warnock said,
we saw people lose their homes, people lose their jobs and their retirement savings.
I hope that we will learn some lessons. Right now, the administration isn't really waiting to deregulate. It's kind of
dismantling day-by-day operations. It's my understanding that the SEC has shuttered
regional offices, including the Philadelphia office that serves Delaware, and offered buyouts,
maybe $50,000 for people to resign or retire. Do you agree with shuttering these regional offices?
Well, Senator, it's been now 15 years since I was at the agency,
so I don't really know what the management is like or what the efficiency is
or how best to make sure that we're using taxpayer money.
Did you think they were overstaffed when you were there?
Well, I don't really remember.
And I wasn't, again, commissioners don't have influence
really over the HR part of the agency.
So as a chairman coming in, that will be on my desk.
I think one of the big concerns is that without the staff,
it's hard to have oversight.
A lot of folks rely on the SEC, the no action letters, for example, businesses that are
trying to process an IPO.
And so I think it's going to be vitally important that there actually be people there that can
do the work.
Yeah, they are vital.
Very vital. Lastly, I would just say, as a person coming from a state where the financial sector is
vitally important, you know, your jobs are important. We have six CDFIs in our state.
CDFIs in our state. We have community bank. And so these banks, these institutions support
small businesses. They support our communities. And so I hope that there will still be a strong
focus on them as well. Thank you, Mr. Chairman. And I yield back.
Thank you, ma'am. Senator Alselbrooks.
Thank you so much, Mr. Chair, Ranking Member Warren as well, and to all of the nominees,
congratulations on your nominations and thanks for being here today. I'm going to try to quickly
get through just four questions, and I agree with my colleague that the work we're here to discuss
today literally will undergird the economic success of our country. So these are very,
very important questions. Regarding transit,
I want to start with Congressman Molinaro and talk about transit, which has traditionally
been bipartisan. That's the approach that's been taken toward transit, advancing transit
priorities. And I look forward to working with this committee and with you, if confirmed.
The first question is regarding discretionary federal grants that are so important and provide
critical funding for public transit projects, and they supplement often the formulas that
many of the states use, like Maryland.
But unlike formula funding, these competitive grants allow local and regional transit agencies
and their partners to secure additional resources for
projects that address specific community needs. I want to list a few of these important programs,
including the capital investment grants program, the buses and bus facilities program,
the low or no emission program, and the better utilizingilizing Investments to Leverage Development, the BUILD program, and ask if you are confirmed, would you advocate for robust funding for these important programs?
First, Senator, the answer is yes.
Second, I would offer to you, having served in local government,
I truly understand the value of making sure that those additional dollars,
while discretionary, still written into statute, are available to regional and
smaller transit organizations.
And I would just say, while mayor was the title I enjoyed the most, county executive
is one where I got done the most.
So it's nice to be with you today.
Thank you so much.
The second question, Mr. Congressman, is regarding the Transit Workers Union and the work that they do. I know that
you mentioned just a few moments ago the great respect that you have for our civil servants.
And as you know, we've seen it's no secret, many of them are my constituents. And as you are aware,
there have been so many firings and such that have happened really unceremoniously. So I just want to ask you, are you aware of any plans to fire FTE employees if you are confirmed?
There's one no way that I would know that, so I don't.
But I would reaffirm my commitment to both the career staff, but also to the transit workers whose safety and lives are valuable in moving Americans.
And we'll be working together with you and your staff to address, I know, the concerns that you have for transit workers in particular.
Well, you know, do you support then the reducing of the workforce there? I know that you are not
maybe aware at the moment, but are you supportive of reducing the FTA workforce?
Again, I'm going to start, should I be given the honor of serving with those
decisions having been made? I will certainly advocate for the workforce and for the work
that they do. As I said, as a local government official, on any given day, we would have to wake
up to do more with less. That's the expectation. But you have my commitment to advocate for not
only the agency, but the transit organizations and the people who rely on those transit opportunities across America.
Thank you. Let me just go quickly. I see the time is tolling. Mr. Atkins, I want to ask you quickly.
You were questioned just a moment ago regarding a case that is happening right now.
right now. And acting SEC Chairman Mark Uyeda effectively asked SEC staff for a loyalty pledge
when SEC staff were considering an enforcement action against Elon Musk for failing to disclose
vital information about Twitter's stock price. And I hope you can just answer really quickly,
yes or no, will you commit to not allowing any political influence from the White House or the Department of Government Efficiency on the SEC's supervisory and enforcement decisions against companies?
Well, I think we should call the shots as they are, and I don't believe in any sort of political influence.
Political influence. So you would oppose any political interference?
I just don't think there will be any when I'm chairman.
Okay, but if there is, you will oppose it.
And will you commit also to resisting any effort by DOGE to ignore the congressional direction regarding staffing and funding for each division because you recognize that that funding is set by Congress?
recognize that that funding is set by Congress? Well, I will work with Congress and I will see
what the situation is there and take suggestions wherever they may come from, but it'll ultimately
be my decision. Okay. And finally, Mr. Pettit, just very quickly, I just want to ask you also
whether you agree. Secretary Scott Bessent recently said the CDFIs are a key component
supporting Main Street America. Do you agree
with that? Yes, Senator, I do. I've witnessed firsthand in my role here in the Senate,
the role that CDFIs play in both rural and urban communities. Thank you. I yield. Thank you, ma'am.
Senator Banks. Thank you, Mr. Chairman. Mr. Atkins, manufacturing relies on intensive
capital investment to build plants by equipment and develop technology on intensive capital investment to build plants, buy equipment, and develop technology.
But capital investment available to companies big and small has stagnated in recent years.
The JOBS Act, which was signed into law a decade ago, made it easier for companies to sell stock.
But there is still a huge regulatory burden on companies that are trying to go public.
How can the SEC reduce that regulatory burden?
Well, Senator, there are fewer, 30% or so, fewer public companies today than 30 years ago,
and a lot of that, and very much fewer new companies coming in through IPOs. And so,
a lot of that is the regulatory burden. A lot of that is the litigation issue, torts, lawsuits, that sort of thing. So I think all of that needs to be focused on because that is hurting our capital markets. It's hurting the ability for young companies to get capital. They then rely, of course, on the private markets because the public markets are dysfunctional. So we need ideas on what the SEC can do about it.
Well, I think we'll do to work with you to scale that back.
Well, I think part of the problem is that the SEC never fully implemented the JOBS Act.
So that's as you referenced to that.
And so I think we need to look at that and re-examine it and work with you all in Congress to maybe have some changes to
statutes that could then help then turbocharge the new issue market. Now, on that note, how can
we encourage more of the kind of capital investment that will help American companies compete against
China's manufacturing economy? Well, I think, again, I mean, there's a lot of capital out there,
but it's just not coming into the public markets because of all of the roadblocks to it,
the regulatory and other sorts of roadblocks.
And so if we can streamline that and then have encouraged people to utilize the public markets. I think that will
be for the better. I had two other committee hearings going on, so I might have missed
some of this conversation. And you might have already talked about this, but as you know,
the last SEC chairman, Gary Gensler, was a big fan of the so-called ESG investing,
Chairman Gary Gensler was a big fan of the so-called ESG investing, and he pressured Wall Street to adopt it.
And this is basically an attempt to force regular people like who I represent,
hardworking Hoosiers who I represent at home, to invest in companies that promote left-wing social causes
that they often disagree with instead of companies that build and make great things and sustain this American economy.
Do you think ESG investment makes America's economy stronger and why or why not?
Well, I want to get politics out of the financial markets and out of how the SEC interacts with the financial markets. And unfortunately, there were some out there who were using other people's money to try to influence corporations through the distortions
of the corporate governance process and that sort of thing. So that will end and we will have
protections in place so that money managers and others will be focused on actual investment strategy and not on politics.
I look forward to working with you on that.
And on that note, how can we encourage investors to fund companies that actually make things?
Sorry, fund?
Actually make, like, invest in companies that actually make things and build things.
And I think about the manufacturing economy in Indiana.
We're the number one manufacturing state per capita in the country.
And what can we do to promote investors to invest there rather than in woke causes?
And I don't know if that makes sense, but it's like we want investors to invest in companies that do and make things, not in other social causes.
Well, I think some of that is maybe some of the distortions and the way some of these money managers have sold products.
But I think ultimately the marketplace and investors themselves, you know, have you've seen a whole shift here recently away from those sorts of funds that you're talking about into more nuts and bolts types of things.
And I think that's good for America and good for for our economy.
Thank you. I yield back.
Thanks, Senator.
That concludes the questions and answers portion of today's hearing. I'd like to thank our nominees for testifying before the committee today and thank you for your willingness
to serve our country. For senators, all follow-on questions for the record must be submitted by
noon tomorrow, Friday, March 28th. And for our witnesses, please respond by Monday, March 31st at noon as well to the written
questions you receive in order to facilitate this committee promptly processing your nominations.
With that, this hearing is adjourned. Thank you. Thank you. Thank you.
