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House Passes Phillips Bill to Increase Oversight of Banking Regulators

This week, the House of Representatives passed the bipartisan Prudential Regulator Oversight Act (H.R. 4841), authored by Rep. Dean Phillips (MN-03). The legislation requires federal prudential banking regulators to provide annual testimony to the House Financial Services Committee, along with semiannual reports on their supervisory and regulatory activities. Reps. Barry Loudermilk (R-GA), Anthony Gonzalez (R-OH), and Joyce Beatty (D-OH) are original co-sponsors.

Prudential regulators—the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA)—are responsible for promoting bank solvency and avoiding bank failures, and thus protect taxpayers and the stability of the financial system.

“Congress has an important role to play in ensuring that Americans know that their government is doing everything it can to protect their savings and retirement. This bill does just that,” Phillips said. “Every American knows that banking is complicated, and no institution is too big for oversight.”

When the Dodd-Frank Act was passed in 2010 in response to the financial crisis, it became a requirement and an expectation that Congress would hear from the leaders at the Federal Reserve at regular intervals regarding its efforts, activities and plans with respect to their supervisory conduct. Yet there is no such requirement for regulators at the FDIC, the NCUA or the OCC—institutions that are charged with monitoring the safety and soundness of the U.S. financial system, as well as compliance with federal banking laws approved by Congress.