Elizabeth Warren Presses FDIC Chair Nominee: Some ‘Workplace Complaints’ Were Filed Against You

3 months ago

Earlier this month, Sen. Elizabeth Warren (D-MA) questioned FDIC Chairperson Nominee Christy Goldsmith Romero on qualifications and her background during a Senate Banking Committee hearing.

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Transcript

00:00Senator Tillis. Senator Warren from Massachusetts. Thank you, Mr. Chairman, and congratulations to all of our nominees. Good to see you here today.

00:08So, Commissioner Goldsmith-Romero, as chair of the FDIC, your job would involve not only helping to prevent bank crises,

00:17but also cleaning up after them when the banks fail.

00:22You've had decades of experience as a financial regulator,

00:26including getting up close and personal with teetering banks during your 10 years as head of SIGTARP.

00:33In the fallout from the 2008 financial crisis, Congress created a $700 billion fund called the Troubled Asset Relief Program, or TARP.

00:44It was designed to stabilize the financial system, and you led the oversight of that huge fund for a decade.

00:52You also managed SIGTARP's $45 million operating budget and its hundreds of staff.

01:00By all accounts, you did so with incredible success, recovering over $11 billion for the American people.

01:07In fact, I understand that for every dollar your office spent, the American taxpayer got a $29 return.

01:16That's pretty good.

01:19Commissioner Goldsmith-Romero, your work at SIGTARP required you to review the quality of bank assets,

01:26confidential examination reports, management processes, and compliance with federal regulations.

01:34So how does that compare with the kind of work a bank examiner does at the OCC, the FDIC, or the Federal Reserve?

01:45It's very, very, very similar, Senator. I appreciate that question.

01:49So we would go in just like a bank examiner goes in.

01:52In fact, sometimes we'd grab the operating system and go through the banks.

01:55We'd look at what led up to the call reports. We'd trend out the call reports.

01:59We'd see changes in Camel's ratings. I mean, we would go deep into these banks.

02:03I think the difference is that often we had more time to look at these.

02:08We dealt with a lot of failed banks, troubled banks.

02:11We would determine the cause of the failure.

02:14And then when we would determine the cause of the failure, if we could hold some bankers accountable for that,

02:18we would seek reimbursement to the FDIC for losses to the deposit insurance fund.

02:24That's harder for bank examiners to do this.

02:27And then we had a higher standard that we had to prove in doing our work.

02:33All right. And that's where your $29 to $1 invested came from, holding these folks accountable.

02:39Yeah, this is how we got our great return on investment.

02:43Good. You know, it seems like pretty useful experience for the person named to lead the agency in charge of dealing with failed banks.

02:50In fact, I can't think of better experience.

02:54The last Republican who was named to head the FDIC had no experience in dealing with failed banks.

03:01Ms. Goldsmith-Romero, you ran SIGTARP at a time of extraordinary upheaval in the banking industry.

03:08Can you estimate how many troubled banks you dealt with?

03:13Hundreds. I mean, there was more than 700 banks in TARP.

03:17You know, we were constantly working with them, trying to understand their health and their condition and risk that they faced.

03:24And then we investigated and went very deep into triple digits.

03:28OK. So you spent years digging through the guts of troubled banks and compliance with banking and securities laws.

03:37You kept some open, others you ended up closing.

03:40And that experience is pretty much spot on for somebody to lead the agency in charge of monitoring the banks and cleaning up the ones that fail.

03:49Commissioner Goldsmith-Romero, we know that there are workplace issues at the FDIC.

03:56During your time at SIGTARP, there were some workplace complaints filed.

04:02Should that be a red flag that you are not a successful manager?

04:07No, Senator. You want to have a process that people feel safe using and that they actually do use and they're not fearful of.

04:15And that does not exist at the FDIC.

04:18But you also want to look at the results.

04:20And in 11 years, we only had one finding against us early in my tenure, and I took it seriously and addressed it.

04:27So ultimately, what you want is to set up an environment of high dignity, professionalism, respect, employees feel supported and valued,

04:35so that they'll come in and they'll give 110%, and that's how we got such great results at SIGTARP.

04:41Well, I very much appreciate both that you have thought through these issues and actually have extensive experience with it.

04:49These are critically important economic positions that the nominees before us are eminently qualified to fill.

04:56I'm sorry, I don't have time to talk with everyone, but I really appreciate your work here.

05:01Thank you, Mr. Chairman.

Elizabeth Warren Presses FDIC Chair Nominee: Some ‘Workplace Complaints’ Were Filed Against You

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