Transcripts For CSPAN Federal Reserve Chair Powell And Treasury Sec. Mnuchin Address Testify... 20240712

Aid package in congress. The House Financial Services meeting is just over two hours. The i plan to continue the hearing if votes are called. Both of you have agreed to be here for two hours from the start of the hearing, and i thank you. The chair is authorized to declare recess of the committee anytime. The members and arresting those witnesses to the First Full Committee Hearing conducted by the committee on financial services. As the congress breaks new ground with these hearings, i want to remind members of the two matters including some required by the regulations accompanying the House Resolution 965 which established the framework for remote and hybrid committee proceedings. First i would ask all members to keep themselves muted when they are not being recognized. Members on the platform owner responsible for meeting and amusing themselves. The staff has been instructed not to mute members. Members on the platform are reminded they may attend one hearing at a times if they were participating today please remain during the hearing. Members should try to avoid coming in and ou out of the meeg particularly during the question period. After the hearing members wish to be recognized that chair will commence to identify themselves by name so as to facilitate the chairs recognition. I would also ask members be patient given the nature of the Online Platform that can be issues and in addition the chair informs the members participating in person enforcing the order and decorum the chair has a duty to protect the safety of members and the physician provided the following guidance for the u. S. House of representatives meetings in a limited and closed space for the greater than 15 minutes they are recovered. Accordingly, the chair will treat Wearing Masks as a matter of order and decorum and all members should wear a mask. The chair has a preference to continue to wear a mask. Members who do not wish to wear a mask may participate virtually through a platform. Without objection, two resolutions distributed to all membermembers offices of establg the Committee Task force is for the remainder of 2020 are approved. This hearing is entitled oversight in the department of Treasury Department and Federal Reserve. This is the committees firstquarter leering for oversight of the various facilities. I would like to inform members are witnesses have a hard stop today at 2 00. I now recognize myself for four minutes to get an opening statement. Welcome back. The pandemic continues to have a terrible impact. More than 126,000 people have lost their lives and this past sunday there were 40,000 new cases of covid19, the highest numbers of daily cases. So, the rate was 13. 3 nearly four times higher than it was last day. All of the job gains of the past decade has been wiped out. Communities of color have been affected disproportionately both by the virus and its economic impacts. The centers for Disease Control reports that figure four to five times more likely than white to be hospitalized for covid19. And half of all black adults are not working. During the foreclosure crisis, we have a similarly disproportionate impact on the communities of color. This was followed by an unequal recovery the agencies and Congress Must do all that we can to ensure history doesnt repeat itself. Including taking many calls to strengthen the implementation of the act. Secretary mnuchin, youve use your authority to provide the development of the Financial Institutions in minority institutions greater access including by setting aside 10 billion for them to lend to ensure they get to the small minority owned businesses. Chairmachairman powell, youve d with us to reduce the mainstream facilities from 1 million to 250,002 extend the length of the loans. Theyve also brought the eligibility of the liquidity facilities to increase access to a greater number. The act has provided important to the struggling families and communities but as the pandemic has driven them so much should our efforts and so with i now recognize the Ranking Member of the committee, the gentleman from North Carolina for four five minutes. Thank you for being before the committee. Its good to see your Smiling Faces behind your masks. Im grateful that we were able to assemble. This is a large undertaking for the largest committee in congress. And i do want to commend the chairwoman for those efforts so that we can actually have this hybrid hearing. It shows the congress of the government is working even if we have to do so using technology. Thank you for your response since the crisis began. I want is the first of all i believe the fed and the treasure the actions pervaded the worst economic catastrophe that there is more work to be done. Its important to remember this isnt a crisis is caused by irresponsible choices by any specific industry or corporati corporation. What we have seen is the impact of the voluntary shutdown in the economy and effort to save lives. The bipartisan act directed the Treasury Department and the Federal Reserve to stand up in response to the programs. There were unthinkable even months ago. And to do so quickly youve done so rather quickly. Now that many of the programs were up and running we must be forward thinking to seek the solutions to return us to the roaring economy before the Global Health crisis. That means we need to understand the nature of what weve done and what we need to do Going Forward. We know the pandemic has touched nearly every aspect of the economy and every family. Facilities discussed need to be far reaching and responsive to economic conditions, not political. I know there are a number of programs that have been desired by policymakers to become Something Like that. That is into the appropriate response in commensurate with the law. Members have a lot of questions about fiscal policy and the monetary see which the chair man is best suited to. I think the understanding of that is important for us as policymakers to experience the beginning of the hearing from rather than to defer to another. The rolling congress is to assess these programs, determine the goals for the additional and appropriate entity to provide relief. Of course we also need access to key programmatic data so i want to commend secretary mnuchin for coming forward with the type of oversight material and massive unprecedented way with the type of long leve log level data thae requested in congress and provide it in a transparent way. Its staggering in such a short period of time. I hope my colleagues will use this appropriately so we can make sure that they are working. I want to commend you for the delivery of the program so effectively and so quickly. It wasnt perfect but it saved millions of jobs. Youve made your work good in terms of action and the adults confidence thank you for following through on your word and commitment. There is positive news in terms of the assessment and i want to thank you for being here in the first quarterly oversight hearing. The. Thank you and we welcome you back. The data were released last week and demonstrate unequal access on the basis of race and ethnicity that remains in the norm today. This is something that we can do something about. But there is a problem. Many of the people who have the authority and are in positions to make a difference refused to even acknowledge that the problem exists. I have the evidence and pictures from prior hearings. The ones to my right ask do you believe discrimination in lending exists. One person has his hand up. Hes with the naacp. Hes africanamerican. The anglo persons on the panel, these are the problems we have to contend with. I will yield back the balance of my time. I will now recognize the subcommittee Ranking Member for one minute. I will rise to the questions ask yoas the widow two weeks agi lost my wife unexpectedly to a heart condition and want to express my sincere appreciation in the sympathy for the greatest legacy in this time it means so much and i think all of you. Thank you very much and now you may take a minute if you live on the subject today. Thank you for your continued efforts to ameliorate the effects of the government imposed shutdown arising out of the pandemic. Congress acted decisively to the passage of the act and other legislation to mitigate the damage to the economy to keep people employed in the business is strong to ensure the economy can emerge on the other side in the position for longterm growth. Congress directed him to play a Critical Role in the response throughout the process you both have been decisively aggressive in using the tools at their disposal and incredibly responsive to the congressional concerns with appropriate adjustments including several they cannot see you right now. And there are elements that could still be improved or adjusted to honor the intent and i look forward to talking to you about those today including and especially in the commercial real estate and look forward to discussing this today. And again, thank you both of you for being here today. We have the secretary of the treasury who served in this position since 2017. Hes testified before the committee on previous occasions and i believe he doesnt need any further introduction. Next, we have jerome powell, the chair of the Federal Reserve bank system. He served on the board of governors since 2012 and a chair since 2017. Mr. Powell has testified before the committee, and i believe that he doesnt need any further introduction. Without objection, your statements will be made a part of the record. Each of you will have five minutes to summarize your testimony. When you have a minute remaining, the yellow light will appear and at that time i would ask you to wrap up your testimony so we can be respectful of the Community Members time. Secretary mnuchin, you are now recognized to present your testimony. Thank you very much. Let me express my condolences for your loss. Chairwoman waters, Ranking Member and members of the committee, im pleased to join today to discuss how the Treasury Department and Federal Reserve are working together to provide liquidity to the markets, business, households, as well as state and municipal governments. We remain committed to making sure every american gets back to work as quickly as possible. They continue to recover and the jobs report for the month passed into exceeded expectations and after experts predicted nearly 8 million lost the Unemployment Rate is still historically high we are seeing the conditions will improve significantly and third and fourth quarters this year. Its forecasting the gdp will grow by 17 annualized in the Third Quarter and by 9 in the fourth quarter. 79 of the Small Businesses are at least partially open and half of the remaining businesses are opening very soon. Retail sales rose by 18 more than doubled expectation and investors and business have historically high caste possessions, the highest levels since 1992 indicating the private capital is ready to return as the communities reopened. We are the strong position to recover because the Administration Working with congress on a bipartisan basis that passes legislation and provide liquidity to the market in particular keeping employees connected to their jobs. To address these critical economic issues. Treasury has been hard at work implementing the program. We have improved over 4. 8 million Small Business loans for 519 billion. Economic impact payments were distributed with nearly 160 million payments in record time. Programs to support a dh and other eligible business we have approved and dispersed over 27 million to over 500 airlines and other Aviation Business preserving hundreds of thousands of jobs. We are in the process of documenting loans to the business is businesses and critl security for approximately 25 million. With the money to tribal governments that had also granted treasury the authority to provide 454 billion to support Federal Reserve lending facilities under section 133. Since march 17 using the Funds Available dave approved a number of Federal Reserve programs. With the money market mutual program, the primary market corporate federal facility, the secondary facility for the main street facility and the municipal facilities and the ppp lending facility. Weve committed approximately 200 billion to support the scum othese,the announcement of these programs have helped unlock markets and promote muchneeded access to liquidity. We have over 250 billion remaining to create or expand programs as needed. Will we begin to have conversations around the supplemental relief legislation, we look forward to working with congress on a bipartisan basis in july on any other further legislation that will be necessary. We are closely monitoring the results into seeing the conditions improve. We anticipate any additional relief would be targeted to Certain Industries that have been especially hard hit by the pandemic with a focus on jobs and putting more americans back to work that is due to no fault of their own. The Treasury Department is implementing the act with transparency and accountability. We are providing information to the governmentwide reporting on usa spending and updates to the congress. We are also cooperating with the congressional Oversight Committee, the gao and others. We are pleased to Federal Reserve has announced plans on its website regarding its facilities. The chair and i have had a very productive meetings with Board Members of the Oversight Committee and we look forward to continuing to work with them. Thank you very much. Chair powell you are recognized tare recognizedto pr. Members of the committee, thank you for the opportunity to testify today to discuss the extraordinary challenges the nation is facing into th and ths we are taking to address them. We need as the pandemic continues in this hardship taking the livelihoods both at home and around the world. This is a Global Public Health Crisis and we remain grateful to the Health Care Professionals for the delivery of the most important response into to the essential workers at hopeless meet our daily needs. We have dedicated people to put themselves at risk day after day and to serve the country. Beginning in march, the virus and controlling its spread had the declining Economic Activity in the search and job losses. As the economy reopens on incoming data is beginning to reflect the resumption of Economic Activity. Any businesses are opening up their doors, hiring is picking up and spend and is increasing. The economy has entered an important new phase and it has done so sooner than expected. It also presents new challenges to keep the virus in check. While recent Economic Data offers positive signs, we are keeping in mind more than 20 million have lost their jobs and that their opinion hasnt been spread. The rising joblessness has been especially severe for africanamericans, women and hispanics. This reversal of the economic fortune has caused a level of pain that is hard amid the great uncertainty in the future. Fast forward and it remains extraordinarily uncertain and it will depend in large part the success in gaining the virus. A full recovery is unlikely to occur until people know it is safe to engage in a broad range of activities. It will also depend on the policy actions taken at all levels of government to provide relief to support the recovery for as long as is needed. The Federal Reserve is strongly committed to using the tools to do whatever we can for as long as it takes to provide relief and stability to ensure that it will be as strong as possible and limit damage to the economy. After lowering the federal funds rate to essentially zero, the actions so far fall into four categories. Stabilizing the treasury and agency in the markets, money market and liquidity and funding measures could affect efforts to support the flow of credit in the economy, and targeted to givgetthree measures to supporte efforts. So far, we have created 11 facilities under section 13 under the act supports liquidity from the end of the float t floe businesses in the state and local governments. Without access to credit, families can be forced to cut back on this as it is, lose their homes, businesses forced to downsize or close resulting in the further loss of jobs and incomes had worsening the income. The lending facilities have all been undertaken with the approval of the treasury secretary and many are supported with the care act. The status is discussed in greater length in my written statement which i will provide to the committee. The fed will continue to use these powers forcefully, directly and aggressively until we are confident the nation is on the road to recovery. When the time comes, after the crisis is past, we will put these tools back in the toolbox. I would stress these were lending powers and not spending powers and also notably designed the facilities to work with a broad range of businesses and municipalities. We do not target particular firms. Elected officials have to tax and spend and make decisions about where to first direct such targeted relief. The act and other legislation provide direct help to people, businesses and communities and this is making it a critical difference not just in helping families and businesses in their time of need but also implementing a longlasting damage to the economy. Public operations depend on transparency. At the fed we are committed to transparency particularly in deploying emergency powers. Thank you and we look forward to the questions. Thank you. I now recognize myself for five minutes of questions. As i mentioned in my opening, the pandemic is strengthening. And so tooes must our response. About the need for more congressionacongressional actiot the communities, you said, and i quote, there are Something Like 25 Million People still out of a job in full or in part due to the pandemic. I would think that it would be a concern if congress were to pullback from the support provided to quickly. Do you think congress should provide Financial Assistance . Thank you chair. I tried to keep my distance referring to the employment insurance and for the specifics of what you need to be doing i would refer to the t treasury secretary on these matters. So you put it off find secretary mnuchin. So the liquidity facility many jurisdictions feel left out. But perhaps there was a way they could be eligible did you take a serious look at that quick. Yes. And before the pandemic said in that was the minimum standard but of course businesses in the territories would be eligible more than the mainstream. Some of that revenue based facilities that are below the minimum and actually we are reviewing in this facility at the moment. That whether or not the house and senate as it relates to the ppe have had conversations with the committee in the senate about trepurpose seeing 335 million. And look forward to working with both the house and the senate to announce legislation by the end of july. The gentleman from North Carolina is recognized for five minutes. Secretary mnuchin i agree there is wide agreement your engagement of the ppe Program Makes things largely better. You have four. 5 million Small Businesses that is quite modest but it is widescale. So what word you say regarding the additional funds purposed for ppe what should be our focus as policymakers to repurpose f 134 million . Is it a loan program . How do you see this fitting in with the actions of mainstream . I appreciate your comments. Passing the last cares act the economy was a difficult shape and we needed to get money quickly and progress that took three or four months was not the focus. I think there appears to be bipartisan support to repurpose the 330 billion to expand that to businesses that are most hard hit with a requirement revenues had udropped significantly like restaurants and hotels and others were it is critical to get people back to work. That seems like a reasonable step in the right direction. Chairman powell, the reputation you have garnered this year in particular that your actions have then predictable and you signal what you are going to do and follow through. Transparenti laying out the metrics for action and he followed those metrics. Incredible. One example is an announcement you said you would support Corporate Bonds and by saying you will support Corporate Bonds a market acted as if it was already off on up and running to the point once you are up and running people ask why you follow through on the program. I think thats important to note that transparency and guidance and communication to be effective in this opening stage. So along those lines in terms of action on the stress test to restrict dividends and buybacks and restraints on the large Financial Institutions i would call that strong medicine. What we want to understand are the metrics that the federal use in order to make these judgments and assessments over the next couple of months with financial financials. You have to start with the two major facts one is the Banking System is very strong and has been a source of strength. They have been taking on a wave of deposits engaging in forbearance so there is restraint unlike the last crisis it is also the fact things are highly uncertain. So to preserve that what we have done is stop all Share Repurchase and increases of dividends to preserve a level of capitaler in the system if you address uncertainty, we did burn the Sensitivity Analysis to assess the overall strength of the system and the downside cases. The majority of firms were still adequately capitalized through all of those scenarios notwithstanding we set for the first time and i history ofll test we would ask the banks to resubmit capital and look at thef results again as we learn more about the crisis and with those precise metrics we will provide more clarity Going Forward. So you are asserting you will actively review this to assure we will not have a financial crisis as a result. Yes. We learn so much every quarter the economy is highly uncertain dividends are declared every quarter we stopped the overwhelming majority of distribution we think thats the right place to be. Thank you for your leadershi leadership. Also thank you secretary mnuchin for your testimony. Thank you i recognize the gentleman from new york for five minutes. Thank you. Welcome. Secretary mnuchin i would like to ask you about a troubling foversight issue. As the chair of the Oversight Committee i take these matters very seriously and i hope you do too. In the cares act we have the Pandemic Response Accountability Committee of independent inspectors general that is in charge of all the money spent of the cares act. Identify ways tried interviews. Last month last month a legal was issued to have authority to see trillions of dollarss of cares act spending. To put it bluntly, this legal analysis is so bad, it borders on bad faith. The opinion claims new Evidence Congress did not intend to have oversight over anything in the first half including the ppe program and lending facilities the 150 billion of funding by states and local governments. So i would say secretary mnuchin this interpretation is wrong. Senator peters and i have enacted legislation to hinder prthe possibility. So now secretary mnuchin i would say to be together in good faith and with other bills before congress i look at this erroneous legal opinion and i would like you to commit to this section of the care fact to have oversight authorities applying for all spending. This is very important that you can show that you are serious from the cares act. Thank you i appreciate your comments and i assure you we are working with the Oversight Committees and as it relates to this i can assure you im happy to have our office follow up with you as it t relates to the issue to monitor a more than happy for those who has primary oversight to make sure that we accommodate. Im askingot what im asking to ask you to commit to interpret to oversee all of the cares act spending that is what congress wanted there is a problem with the interpretation it is very clear you are allowing that oversight. With that portion i would say i have very direct discussions with people with oversight thats why we agreed to the oversight i committee with full transparency and information not required we do have transparency im happy to address your concerns i think its important that there isnt overlap that let me emphasize we will try to do what we can to accommodate. And very disappointed with that answer will have to come up with a solution it iso very clear to have oversight of all care spending. I yield back. The gentleman from missouri is recognized for five minutes. Thinking madam chairwoman thank you for joining us today thank you for your leadership during this unprecedented Time United States department of treasury and the federal reserv reserve. Both effectively and rapidly with the economic crisis of covid19 with trillions of dollars and if those are participating in when could this be made available . In the range of 300 banks that number is a few days old have the registration process. It takes a few days but thats how many will come out of the pipeline. The size ranges from the large to the very small those yre well represented but it does range. And you will be provided with information on a regular basis. We are working with borrowers to figure out the right way to connect borrowers and lenders im sorry we are working with the lenders to put something together in the most efficient way. Thank you chairman power in your effort to create broadbased programs do you think the mainstream facility will need to expand any further to meet the needs of businesses . As you have seen we have worked very closely on this and we are very willing to learn from experienceve what we are hearing from different parts of the economy. Certainly with the ppe program i hope we would approach this the same way. Wefhe will we are in the relatively early stages to open up a nonprofit facility and we will be watching as regular or main street comes online and continues to look at ways to improve that. Chairman power last week the Federal Reserve and the results of the covid19 Sensitivity Analysis underscores the resilience of the Banking System while we can all agree the level of uncertainty continues to be high with the covid19 pandemi pandemic, i believe the Federal Reserve was subjected to extraordinary functions regarding deployment and gdp contraction despite these assumptions the 33 largest banks remain above Tier One Capital requirements. Why does the Federal Reserve have indicated to resubmit plans and in addition an off cycle in the latter part of the year . The Federal Reserve already has Planning Management processes and assumptions. Can you explain that . What they passed was the adverse scenario we had before the pandemic that is what control the outcome at this time also remember the pandemic arrived right in the middle of the stress test. Without going to the usual thorough vetting process three alternative Sensitivity Analysis one was a vshaped recovery one was you shape and a serious double dip that was very seriou serious. We didnt use them to evaluate individual institutions but the broad range. Why lock up Additional Capital now . This has the potential to have Chilling Effect on thenn economy and banks need to provide credit and liquidity to help facilitate economic recovery. I need that clarification and i yield back. Mr. Secretary being blocked by President Trump for providing information requested by congress. No. Have you ever been prevented or prevented anyone from providing access to information with the oversight grdy . If you are referring to, no. So here you are tonight when the programm expires. So you are discussing this rules for the house. Yes. Of course. And leslie have those conversations with a Small Business committee. So to make a determination for what this Program Needs and leslie have access to the data. When we you provide the data . I believe we said by the end ofpr this week to make sure we establish secure. It supposed to be delivered this week so i can assure if i can be given time to speak. Every week were asking with the administrator. I spoke to her before the committee. You say we need to take care of those businesses in the next repurpose 135. At that was intended by congress and we know but what about the millions that were not able to access the programs . And then to get a second loan. And those businesses that are struggling. Chairman power. And with the state of the nation smalle, businesses. How does the failure of Small Businesses that are women and minority owned. Small businesses generate so this could be very important. And then to trigger the most severe of seven. 6 percent this year. Do you agree with this assessment . I would say thats in the range. And the Global Economy . And hypothetically to force governments and people with Economic Activity which is the economicwh activity. Thank you senator and chairman power. I want to commend the chairman on the rule this could be the last time we discussed this but this makes the abstract and difficult to understand which we have seen in the past month to be unpredictable. Commercial paper finances for them to meet their operational needs. And over on with significant strain due to covid19 and then had this facility to land the commercial paper market which ultimately supports businesses and jobs across the country. Can you describe the current indicators how to respond to the facility and has there been a discussion and with liquidity issues . The commercial paper facility has substantially yielded. And then when we announce the facility so largely but not completely with fairly normal function we are not looking to broaden the facility but to have an option. Secretary mnuchin there are reports there is restriction and how to resolve this the china and impacting the terms of the phase one in particular the commitment to purchase 40 billion . And to have serious concerns of the lack of transparency from china. That they would support live up to the phase ith agreement. One laste question. So Tribal Employment with creation and accommodation industries. And the Federal Reserve and treasury working on the challenges faced by the tribe. And those businesses are eligible to participate in as the Economic Activity. And with that general obligation issue. With that i feel that. You are now recognized for five minutes. Secretary mnuchin i just read the press reports that checks are going to people that are deceased but i will urge you to quickly see what you have talk to at the senate this month and the committee about all ppe borrowers. Chairman powell on march 12 but then to prohibit stock buybacks. Thank you very much two weeks ago you went on the record to say the record of concern in congress was to pull back. Thank you for that advocacy and that we need to do more to stimulate this economy. Secretary mnuchin mentioned the support to local and state governments but of course almost all state and local governments cannot run the revenue. With hundreds of billions of dollars that we pass the heroes act and one issue for the main Street Lending program of commercial real estate if they get a loan from you and in the existing mortgage is the bill that i submitted with the business borrowers protection act on a program that we authorized to make data preexisting mortgage. And with russian involvement in afghanistan it appears they have been bold and we dont sanction them very much when we catchld them. And now they took the obscene step of the individual soldiers were limited of how many dead americans they created. And of course the response from the administration and then to lead to more deceased americans soldiers. Your department was supposed to sanction russia and with the chemical weapons act to try to assassinate a russian dissident. And those are allowed by the act. So what it does is it prohibits for americans to the russian government. And with the state owned enterprises and purchases in the secondary market and the end are sanctioning russia has led in the general sense and the press reports has led to putting a bounty on the soldiers. And then to impose the bands. Let me just comment and then of those items at the time but im happy to go back. And please look at it again. I am not commenting and with alleged information. You are now recognized for five minutes. Thank you madam chair and Ranking Member. What the treasury and Federal Reserve response secretary went to commend your efforts the most especially you. The stimulus check and paycheck protection to bring much needed relief thank you for the leadership. Waiting for full implementation. And hearing more about that. And with. Those downturns and is much as 80 percent during the shutdown. If you have the authority that you need with that cares act with that cash flow crisis. Now looking for additional authority. And with the programs and in the sector in the facility. And we do appreciate a certain comment as it relates to the securitization that was before hand it does not lend itself and we continue to look at that. Looking at some of the businesses with a commercial back securities. That there are some very strict obligations. Because additional funding so they can continue to rehire people that employees can maintain. Expressing my concern for businesses with the main Street Lending facilities. Based on the earnings especially with the R D Organization so can you tell me the possibilities of finding access for those businesses like that. And for what we continue to discuss of the Federal Reserve. Ti i yield back. Thank you to both witnesses. I am troubled by a recent report and with those stimulus payments with the garnish in the counterbalances. And i find it troubling the banks words serve as debt collectors. When well treasury issue guidelines and the expectation. So we have had inquiries about the issue from a policy standpoint and that something we need to address because there are certain state laws for the cares act that my understanding that is a state issue. Think about the cruelty. Couldnt you issue and that cares act. Thank you. For many nonprofits and Small Businesses and with the taxes and depreciation and with that metric have you considered applying otherd retrics to main Street Lending programs . Yes and in particular for nonprofits. And then to pay taxes and then those comments from theon wenonprofit community. But then it was pretax cash flow. And as a secretary mentioned, mentioned, and that something with the treasury. And to reduce the minimum loan and by expanding the program. And many Small Businesses. Dnd with the minimum threshold . Not eliminating but yes we are just now getting some help so get up and running so these are personal loans rather than guarantee by the business operator that would be something we look at getting up and running. That you have the threshold of 250,000 those in st. Louis need 100,000. Until they get back on their feet. Is there any consideration given to accommodate . We think about possibly lowering the threshold again. With some very small loans would be difficult but i can see us down the road. Thank you both. Mr. Scott your recognized for five minutes. Chairman powell the disproportionately k impacted africanamericans and other minorities the Capital Markets have significantly and those job losses corrected. Everything we are doing. Taking the 25 Million People and to go to the old job. That is the overriding goal. That is your goal, but what im trying tor get at so what can you do to fix this and balance . What we have been trying to do the supportive financial conditions so when the economy reopens it can be vigorous and strong part of whats driving that which was surprising to the upside. But we have a great opportunity for both of these things. But housing and homeowner. But that goes right into the belly. And to keep people secure. When used 25 or 30 million how they pay their house note or their rent . How are the banks and the Financial Institutions get make money so they can payments . To keep thee Financial System so that you all Start Talking about these things. It may not be everything that you agree with and that was very important. To secretary mnuchin and then to target the needs of agriculture. Its coming. Why cant people see this . Is almost like the farmers were the forgotten ones. Are they qualified will the Small Businesses and along on the misty flats. What are you all doing to pay their Rural Communities because on the food chain is going down. These are small, most of the them, but they are very important. Where are they . Getting lost in the shuffle. You are recognized for five minutes. Thank you for your great leadership during this time. You have been very responsive and cooperative and in different settings. And for that we are grateful. And that times you both exhibited that ability. Both of you in the past have expressed your support and for the testimony of committed for those that engage with crt. And with that framework for fannie and freddie. And then to take that more punitive approach and then is that still appropriate for the crt transactions and the credit risks of the Balance Sheet of two institutions. I agree we should receive relief and then to review well. Issues as and doing a careful review of the whole account. Its hard to let a hearing go. And then after two years estimated impact and then to see set location. And those that it opted for. And most recently it was for delayed implementation with the banks and the nonbanks. And with the reallife scenario. And then to delay cecil. And then to examine the reallife scenario we are going through. That is seriously considered. And executive order and if that doesnts work now and this accounting principle for you to be looking at this. I agree. There is a time and place for rules and regulations. And in the Federal Reserve and chairman powell especially. And the faq but those readings are coming. And then with the unilateral and haphazard. And then to have in theic marketplace. And then we went quickly. And then we brought it out to another group. We are balancing the need to move quickly. And that process is what way are working on. I yield back. Your recognized for five minutes. Point of inquiry. Im sorry. I appreciate that. The word unprecedented by graduates looking around so we have a history and in the hired mans hand mother was born in 1931 in flint michigan and in the dustbowl of the depression and then my grandfather lost his job. Im not sure if this is hunprecedented but in the modern era. But what we do know is we keep the economy moving again. If you cant get kidsow into school anecdotally in my area manufacturers and Service Companies getting enough workers to come and is a contingency there are some various reasons and it is a bit of a disincentive. And how do we distinguish from those . And one of the things i j have proposed and then with the weekly bonus to their employees or even a one time. And with that Unemployment Insurance system. Talking to cheryl and then to survive becausese of it. And then to keep hisca folks. And that is critical and were very important. And in the commas a philadelphiabased in the 20 sexual Fast Growing Company to produce a number of great avproducts but they have been focused on their growth that led to the accumulation of debt and they are not qualified to participate not the way those programs are currently that Companies Like link home that look like sisters lying Success Stories and those to have the debt. In the hope you commit to work with me on that. We are happy to follow up with you. Talk to jim allies she is 64. We want them to hear from you. So to have the small investment in the markets. As they approach retirement. I want to tell them and all the other people and get everybody back to work and to be optimistic of the vaccines and bibles of this terrible disease. Your recognized for five minutes. And then to speak of that importance and with the minority workforce and while this is helpful and that everyone gives a head start in the economy. And on months or years oroc decades. Do we agree structural discrimination in the United States and then to understand that are from whitend communitiesta . Do you agree . I also believe that negative racism that has been financially excluded for decades and then impacted by ther financial crisis and did not borrow their way out of poverty. And then to lift them out of poverty. With that natural investment. With both the private sector and government. the Treasury Department has the capacity and the authority to invest capital into depository institutions, but has never done so. The Treasury Department could use existing authorities from trust funds into mdis, either directly or through custodial accounts. But it does not do so. And since we agree that we need to have investors, would you agree it plays a Critical Role in providing minority community, access to capital, and ask you with the treasury using its existing authority and capital to provide direct support to mdi . To review those authorities and get back to you. Have,thats something we it sounds very interesting. Im not familiar with the authorities, so let me look into it. The cdf eyes did a terrific job, as well. I agree. I concur on that. I look forward to working with you to make sure we are investing and we have public money as well as private money to invest in those mdis, that if they have the capital and wherewithal to move forward, that is the way to govern. Fed made a requirement of Asset Management to broker a deal to partner with minority firms in fulfilling contracts and transactions . Obligations, have for example, with the companies we have contracted with during the pandemic. Ave to address diversity and inclusion issues that their company and also reach out to the minority suppliers as well. And the treasury, secretary mnuchin . Yes. So, then im hearing from both of you that youve committed to incorporating this standing across all capital marketet programs that involve E Partnership with the private sector Going Forward with minority brokerdealers and Asset Managers . Is that correct . It is part of the rulebook now, actually. Mr. Mnuchin . Yes, thats something we work on as well. Thank you. I am out of time and yield back. Mr. Stivers, you are recognized for five minutes. Thank you for being here mr. Secretary. Secretary mnuchin, im hearing from some lenders are being n,accused of failing to take the agents of the businesses and preservation of their Paycheck Protection Program loan submissions. Before participating b in the p, ive heard they may be exposed to the legal liability without sufficient safeguards in what is essentially a governmenty grant program, but they largely participated anyway because obviously they felt they had the duty toy the companys and the customers in a time of need. Now im told many things are being targeted by litigation that takes advantage of the lack of clarity about how agencies are supposed to be processed and how they work. For example, banks dont have precise answers on where the fees are supposed to come from. Is it an agreement between the bank and agent required before any work on the application is complete or processed . Is this an issue you are aware of and did you have a plan to offer any additional faqs on when they are due and how that works . Ive recently become aware of this issuent as well. But our guidance did say is that banks could be agent fees out of the fees that they received that were intended to be based upon a contractual relationship between the agent and, and to the extent there is any confusion on that, we will look at clarifying it. It would be great if you could do the clarifying faqs because it would prevent litigation or at least allow for the litigation to move expeditiously and less costly through this process. The mac we will review that. Thank you, mr. Secretary. Chairman powell, treasury and the International Association of insurance supervisors stated publicly proposals to retroactively amend Business Interruption policies to cover covid19 claims would endanger financial stability, specifically ais stated they cautioned against the mission of seeking to require insurers to retroactively cover covid19 related losses such as Business Insurance and those were excluded in the insurance contracts. Such initiatives could also threaten policyholder protection and financial stability. Do you share the concern requiring payoffs of uncovered policies and they could result in insurer consultancies and destabilize the Financial System . Thats an issue thats realls kind of outside the purpose for a of our authority, except as you point out the extent it relates to the financial stability. So, we are monitoring it. So far, we havent taken a position that we are aware. Please continue to monitor it. If it results in any kind of destabilization of the Financial System, thats your role. I get it, but please, Pay Attention to it. Chairman powell, can you give a kind of overview of the current state of the municipal finance markets and the effect on the feds efforts to stabilize . The municipal markets like so many other markets really just about shut down in the middle of march, and we announced the Municipal Liquidity facility. That announcement has had an enormous effect on the functioning of the market, so you see a lot of healing in that market and issuance of different Credit Ratings and also different revenue. So it hasnt returned to where it was in february of 20 and 20, but theres been a lot of progress. As an example, the state of illinois did most of its financing in the private markets without our support and then came to our facility for its last piece of financing. So im very pleased with the announcement of that was strong and effective and is helping a lot of the borrowers now. Finally, i just want to say thank you, secretary mnuchin and chair powell for your leadership and availability through this crisis. This hasntet been easy. Clearly, mistakes will happen when we are in uncharted waters, but you both have been bold in your leadership and have made a difference and help businesses survive. Youve helped the economy survive. Thank you for your leadership, and we wouldnt be doing as well without it. Theres more work to be done and i appreciate everything youve done and hope you continue to focus on Small Businesses and medium businesses around main street. Thank you so much. Thank you. Mr. Green, you are recognized for five minutes. Thank you, madam chair and the witnesses for appearing as well. I would like to lay a proper predicate for my questions. According to the latest data, in 201and 2019 the vast majority of home purchase loans went to white borrowers at approximately ten times that of loans that went to black and aapi borrowers. The share that with tw went to e borrowers, 60. 3 . Two hispanic borrowers, 9. 2 . To aapi, 5. 7 . And black borrowers, 7 , 60. 3 to white, 7 s, to black borrowers. Even when lending discrimination doesnt result in outright denial of credit, it drives the borrowing cost for minority home buyers. The walls to the black and hispanic borrowers continue to be higherpriced for both conventional and nonconventional one in 2019. Home purchase loans were higherpriced for the following share of borrowers colonco to black borrowers, 20. 3 . Hispanic borrowers, 23 . White borrowers, 8. 3 . Consistently, we see an empirical evidence indicating that there is indigenous discrimination in lending, especially as it relates to people of color. So heres my question, my friends. Adjusting for educational credit score assets and other relevant factors do you believe this discrimination in lending exists against borrowers of color . Ive been collecting these pictures. I keep them in my office. These are pictures of people who deny the existence of this discrimination as it relates to people of color. My question to you is do you believe that this invidious discrimination exists in lending as it relates to people of color . Ti if you do believe so, could you kindly put your hand in the air . Thank you very much. H. Now, next question. Do you believe this invidious discrimination against borrowers of color can be addressed with legislation . Can we craft legislation to help end this invidious discrimination . If you do, kindly raise your hand, can we craft legislation . Chair powell, mr. Mnuchin . May i respond to the answer . If you could be so kind as to what they know where you are going, first, sometimes when people finish it up for what theyve said. That doesnt apply to you of course. We have legislation that need to do a better job. I could say we need to look at the legislation, but i think its more than just legislation. I agree, but do you think that legislation can be part of the remedies they could kindly extend your hand. Okay. Thank you. We have a couple of pieces of legislation, hr 149, the housing fairness act helps to deal with discrimination in housing and relief to people of color and others as well. And hr 166, the lending for all act thathe would put the end to this racebased lending discrimination. Two pieces of legislation that hopefully will move in congress. But here is my question, i believe that its time for us to reconcile in this country. Weve survived slavery, but we didnt reconcile. We survived the invidious discrimination that exists now, segregation, but havent reconciled. If we have a department of reconciliation with the secretary of reconciliation, would you work with a secretary of reconciliation from your department of the agencies that you represent, would you work with such a person to help us reconcile in this country . If so, would you raise your hand . Not knowing what that is i can tell you it would be a department designed to eliminate invidious discrimination and racism, thats what it would be all about him at the cabinet level hopefully. Thank you both. Thank you, madam chair. I will yield back. Thank you. Mr. Barr, you are recognized for fivet b minutes. Thank you, madam chair and to secretary mnuchin and chairman powell, i want to thank you all for your very decisive and aggressive action that youve taken from the outset of this pandemic. I think both the fed and the treasury through theve emergency lending and with the tools weve given for the Stabilization Fund have really made a difference in making a bad situation a lot less bad given the circumstances. So, thank you for your actions. Le an example of the agility that youve sown, let me say in particular is whether representative hill and i send you about streamlining and making less bureaucratic the loan forgiveness of vocation under the ppp program. As i was tremendously helpful for the borrowers and lenders cutting red tape. The easy form is very welcomed and appreciated the fact you were responsive to that. That. What they ask you a followup question about commercial real estate. Thesweve had a couple of quests for mr. Sherman. This is a question we havent addressed yet. Impo hearing from many commercl Property Owners and borrowers in my District Across the country and especially where the occupancy rates remain very, very low, Shopping Center owners, retail clearly hasnt recovered, other businesses significantly disrupted by the pandemic. I think we are going to see without intervention is wave of foreclosureses. Secretary, you did identify the problem with the inflexibility of the servicing agreements, but i think you mentioned that we might need additional legislation to high your back workers. The issue is dead. They cant service their debt because they dont have revenueo so, my question is both of you recently received a letter from me, congressman taylor, congressman lawson and over a hundred of our colleagues urging the fed and treasury to establish a facility to exist especially for those with cmts loans. Secretary, you said you have 250 billion remaining in the esf. To both of you, does the fed have the authority to establish such a facility and do you feel the Market Conditions in commercial real estate warrant action by the fed and the treasury . I appreciate that and thank you for the letter. This is a law to challenge, so we are working with the fed and have not yet figured out a way to set up a facility. So its not out of a lack of interest or lack of desire. There are structural problems. And let me just add in many of these cases, these companies dont need more debt. They need support. So, one of the things we want to look at in the next act, as i said, is Additional Support for the hardest hit industries. As the chair has said, there is a difference between lending and spending. Right. Mr. Chairman . I have the letter right here. You said inn your comments, and its in a letter, more deaths may not be the answer here. That doesnt solve every problem for people who cant currently surface that. Service that. You have these flexible arrangements. Theres there is a problem thato be fixed and we will rack our brains to see how it is something we can do by lending but that is all we can do is create more debt. I wouldnt consider in heis indebtedness it may be too restrictive that they owners could take on Additional Debt to get them through this period of time, but i look forward to working with you whatever the answerl is. Real quick on main street, chairman powell. Ive heard from a number of lenders and Business Owners have indicated the terms of main street may discourage borrowers from applying and lenders from participating. Some lenders have welcomed the changes recently made by the fed, but many are still far from being enthusiastic about purchase a painting. What has been the response thus far fromm the Blender Community and how will the fed encouraged the lender participation given ethe hesitations . Weve had a lot of interest. We do webinars and outreach and weve had more than the 300th tur300 turn up. What the banks tt of mixed. They are not getting a ton of interest from borrowers. Many of them say they expect that will change over the course of the next few months. They do expand that will increase. And i would echo we continue to be open to playing with the formula and making adjustments Going Forward. My time is expired, but the reason it doesnt work for the commercial real estate [inaudible] thankk you i will yield back. Mr. Powell, the issue that we talked about isn. On the radar d we will continue to talk about this issue and Pay Attention to what youre saying to us about it. With the bath, you are recognized for five minutes. Thank you, madam chair. [inaudible] thank you, madam chair. Secretary mnuchin, thank you for being here. Chairman powell, thank you for being here again. I know that youve been asked by a number of members before me about [inaudible] we clearly intended to help during these times. Im frustrated like a lot of people, not only in congress, but a lot t of people around the country. What is your philosophy, mr. Secretary , not philosophy, but what do you have to say about [inaudible] equally supported as an Emergency Program . Let me just first say we need to all do a better job making surof makingsure that we have se fun for the businesses and to support the businesses. In the ppp, weve worked with lots of different people to make sure that the cdf i guess there. But acrosstheboard w across td always be doing a better job. Thank you. Where i am now is dealing with minority businesses. And if i say we all agree we need to do a better job, do you see any ideas on specifically what we could doyo better . We would be happy to work with you on that. Weve been working with a bunch of people to try to figure out how we could use cdfi and make sure they have more access to acapital. Theres a lot of good ideas out there that we need to continue to explore before we have a one solution. I think this multiple solutions. I would just add that we are doing a great deal of outrage in the cdfi to get them access to the programs that we are doing including the ppp. And effectively we are meeting with the National Bank King Association tomorrow on july 1. We are doing a lot of outreach and we think thats having an oneffect. Thank you. I do have a 35, 45 minute meeting [inaudible] i appreciate the detail as best as she could. I just was hoping that the secretary would understand the pressure that exists which means as representatives of theirs we sare also in this pressurized situation and i was hoping this is what we are going to do moving forward. But i appreciate where we are and i would just say you mentioned earlier you cant respond because of classified intelligence, but a im going to sengoing tosend a letter and i n expect a response [inaudible] im sure the next generation and the generation after that will be asking the us what did you do during that time [inaudible] think you and i will yield back the balance of my time. Mr. Tipton, you are recognized for five minutes. Thank you, madam chair. Mr. Secretary, chairman powell, appreciate you taking the time to be here. I appreciate all of the efforts that youv you need to be able o stimulate the economy and to be able to help our folks at home. I did want to bring up an issue weve heard back from our industry. As you know, giving the care act, the government did provide for community is 500,000 more people to be able to apply directly to treasury for assistance. In colorado, that translated to 59 of the 64 counties in colorado that were unable to be ablet to receive direct assistance. Fold recognition obviously. The dollars went over above and beyond to be applied for. I guess, mr. Secretary, i would like to be able to see it has there been any oversight to be able to do what i believe was the congressional intent to be able toe get those dollars back into small communities like those that i represent, and have we had any sort of examination on how the dollars are being spent by the states . We thought the purpose was that we send money to these about 500,000. The reason we didnt do it was truly administrative. We put out right in saying that states should distribute money down. We also had discussionsns with g to review this. So we appreciate the comments. Thank you. Io i appreciate the recognition that the small communities when we look at Small Business, we create seven out of ten jobs. E lot of it is up toen be in rul america. Appreciate the attention on that as we look at any other package that may comeo forward. One of the biggest aspects i think you both haveg spoken tos the ability to get the economy going and to make sure that we are going to be able to create jobs once again. Providing access to credit is going to be critical to be able to do that. We have some that are attempting to be able to wipe the credits clean during the pandemic that its important that we do have an accurate full Credit Profile to be able to add Risk Mitigation that will help ultimatelyof reignite lending in the country more quickly. Secretary mnuchin, could you speak to the importance of being able to maintain a complete Credit Profiles so that the lenders can evaluate credit worthiness for the borrowers . Yes, i believe that is very important. You know, one of the bigger issues that we are hearing on ppp is that the lenders across the country, both big and small, readily answered the call to be able to make those loans out to the Small Businesses during the crisis. And since there was essentially no guidance from the lenders began providing ppp loans, what can agencies do, mr. Secretary, to extend to hold them harmless in terms of provisions to the entirety of the ppp process inadequately protecting the lenders that are trying to be thing . Do the right the lenders were merely intended to be an intermediary. They were the fastest way that we could get money to the businesses. Most of the certifications were certifications that the borrowers have to make and they would be liable for. There were a few things the lenders had to do so just check thwith justcheck the payroll anl documents, but yes, it was to be a passthrough mechanism. Thanknk you. The interim final rule, the lender fees out of the sba indicated that if the conduc thd the loan review and determined the borrower was ineligible for the ppp one, the lender is not eligible for the processing fee, the sba was also able to draw the feature within one year if they determined they were ineligible t for the ppp loan. Considering the lenders as we noted did act in good faith through the ppp process and dedicated a significant outas of resources to be able to help the economy, why did the agencies decide to take this approach . Let me just say i hope that is a very small number of loans as it turns out to be. But the fault of the taxpayers paying fees to the loans that were not made seem to be unfair, and i would say in general i think they were very attractive to the lender. So, there were a small number of loans they made where there was the case. I think that they were still all compensated. At thank you, mr. Secretary. I will yield back. Mr. Perlmutter, you are recognized for five minutes. Thank you, madam chair. Gentlemen, thank you for your testimony today and for your leadership in the three months of this emergency. The pandemic had a blow on the y. Economy and you helped cushion the blow, but we are not out of this by any stretch of the imagination. In colorado, california, utah, arizona, talks texas we have rising discounts. And we also know that at the end of july, the pandemic Unemployment Insurance payments cease editors as it is currently written. Know that the evictions and the foreclosures begin to cease. And in the eight weeks provided heder the ppp, it certainly for those initial takers of the loans they startun to run out. So, i see a brick wall at the end of july. And mr. Secretary, youve played a key role in helping to fashion the fiscal pieces of this, but it care act. We call what we have done in this next iteration, the heroes act. Sowe that the law enforcement, teachers, transportation workers, medical staff dont get laid off in addition to the ones that have already been laid off by local governments, state governments, School Districts. So, id like i asked mr. Powell a question when he was in front of the committee a couple weeks ago on state and local government assistance for tax revenue. He said i would say from a standpoint state and local governments employ Something Like 13 Million People. States have to balance their budgets. And revenues go down and expenses go up, and what the states do is cut costs. And weve seen state and local governments laid off 1. 5 Million People already. State and local governments provide essential services as we all know, so you know that they are great and a big employer, and if i e would say its certainly worth considering. If we dont do something, it will hold back the economic recovery if they continue to lay people off and if they continue to cut essential services. And in fact, that is kind of what happened postthe Global Financial crisis. So, mr. Secretary, as you again were sort of in the middle between the house and the senate and theou white house, i cant k where are you on assisting state and local and School Districts to help backfill the lost revenues that we have seen have been already . Let me first say within the context of the last bill, we mtried to issue guidance that s as flexible as possible, particularly for firefighters, first respondersan and pulleys t said the states could use the money and have a p safe harbor d didnt need to let those people go, which as you said would be the worst time when we need to support all of those people. I am committed to working with both the democrats and republicans on the house and the senate in july. As you said, we have a lot of work features the all come to an end in july. I am committed to continue to have these conversationsll and take great pride in the fact we have enormous bipartisan support in the previous bills and look forward to working with everyone. And i would just ask you because what we have seen, as a democrat, wein passed this. The senate has been sitting on it, even as time is ticking. Andd in colorado, for instance, we are looking at probably a 2. 5 to 3 billion drop in tax revenues this year. See it again next year and probably the year after that. So i would just ask you to really push on that one where theres going to be a lot of people laid off at the worst time and in very essential services. Gentlemen, you have done a heckuva job and get patted on the back now, but we are still in this emergency, and now weve got to focus on moving forward, which is this next iteration, or theres going to be a lot of trouble coming into this summer. With that, i will yield back. Thank you very much. Id like to thank the witnesses for their testimony today. Without objection, all members will have five legislative days within which to set it additional written questions for the witnesses to the chair which will be forwarded to the witnesses for their response. I asked the witnesses to please respond as promptly as you are able. Without objection, all members have five legislative days within which to expend extraneous materials to the chair for the inclusion. This hearing is adjourned. Thank you very much. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] monday night, the president of u. S. Telecom talks about the effect the coronavirus is having on telecommunications. Despite the billions of dollars that were invested, we need congress to work with us and strengthen the theicprivatE Partnership, commitment to universal service, toprovide adequate resources put the broadband infrastructure debate behind us. And close the Digital Divide once and for all. 8 00 eastern. T at sunday night, a Pulitzer Prize winning author on the u. S. Response to the covid19 pandemic and the medical science being used to combat it. I have not seen a collaborative time in the Science Community of this ilk or stature in my life. That is very encouraging news. Asngs have moved as fast they could possibly move. We could have for potential drugs including antibodies. Comment on whether they work or not. Or what settings they work on. Sixill have about modalities to treat the inflammatory case of the virus. Watched sunday night. President trump and First Lady Melania Trump took part in the salute to america