The Digital Currency market and concerns over Marijuana Companies and banking. This is just under three hours. The committee will come to order without objection the clair is authorized to declare a recess of the committee at any time. All members have five legislative days within which to submit materials to the chair. This hearing is for the purpose of receiving the second of treasurys annual report on the Financial Stability of oversight counsel. Now recognize myself for 3 1 2 minutes to give an Opening Statement. Mr. Secretary this is your first appearance before the house. After the tax cuts and jobs act has been signed into law. I want to let you know on behalf of the majority, our grateful we are to you and to the president for your leadership and for helping make this act signed into law. It is truly, truly historic. After eight years of failed economic policies that led to the slowest weakest recovery, the economy is starting to take off in wages are finally growing again. Consumer optimism abounds. Interest rates and possible inflation associated with a breakout of Economic Growth. Artificially low Interest Rates may have ben filtefited some on street but theyre not particularly helpful to main street. We have always known that the fed would face significant challenges in unwinding the Balance Sheet when the economy took off. If youre listening, good luck, chairman powell. You volunteered for the job. Were averaging 3 growth again. Unemployment is at a 17year low. Wages grew at 2. 9 . The fastest in almost a decade. Two million americans have gone back to work. All of this in President Trumps first year in office and were just now on the leading edge of the tax cuts and jobs act. Lets take a look at the impact on the Financial Services industry alone. J. P. Morgan chase recently announced they would be making a 20,000,000,005 Year Investment across the business lines. In addition to increasing wages for the employees, they plan to boost Small Business lending by nearly 20 . And my hometown of dallas, comerica announced theyre boosting the minimum wage to 15 and giving a 1,000 bonus to 4500 employees. Nationwide is giving its employees a 1,000 bonus and increasing the 401 k match. Visa is increasing the 401 k eligibility and contributions as well. Bb t is raging the minimum wage from 12 to 15 an hour. And giving the employees a one time bonus of 1200. Hardly crumbs. And these are just a few of the Financial Services companies that have announced benefits due to the tax cuts and jobs act. Again, mr. Secretary, thank you and thank you to the president. Unfortunately, tax reform alone will not unleash our nations full economic potential. Why . Because for the last eight years our economy has been drowning in a sea of complex, onerous, expensive and job crushing washington red tape. Fortunately the Trump Administration has aggressively cut needless red tape like few others but much work remains including at the Financial Stability oversight counsel. They can clearly serve a vital function and promoting Financial Stability by Monitoring Market developments, facilitating sharing and making policy recommendations to congress to mitigate risk. Unfortunately, they have proven they can harm our economy through the designation of sifis. They eviscerated ge capital ushgs o, one of americas great companies. They capitalized millions of companies from local bakeries to furniture stores, its just gone. In a dangerous effort, it attempted to designate metlife a sifi, an insurance company. The decision was found to be arbitrary and overturned. Mr. Secretary, im encouraged by much of what i read and the annual report. Under the new leadership of a new administration, i look forward to hearing more about it. I now recognize the Ranking Member for four minutes for an Opening Statement. Thank you, mr. Chairman. Welcome back, secretary. Im looking forward to your testimony today on the annual report of the Financial Stability oversight counsel. Im very concerned that the Trump Administration seems ton determined to remove all nonbank systemically important Financial Institutions from fsocs supervision regardless of what threats those institutions may pose to our economy. As we all know, one such Financial Institution aig, nearly brought down the economy in 2008 and had to be bailed out to the tune of 182 billion. Fsoc plays a key role in ensuring the continuing stability of the United States economy. And it must not be weakened or side lined from dealing with the threats posed by risky Financial Institutions. In addition to testimony on fsoc, it is also important today that the secretary are a dress several inquiries on vital matters with National Security implications. Mr. Chairman, as a general matter, the secretarys hand willing of inquires from Committee Democrats has been completely unacceptable. As you know, serious questions have been raised about the finances of President Trump, his family members, and his associates and their involvement with russian government officials and ole i gashgs. As a Ranking Member of the committee with jurisdiction over the Treasury Department, financial crimes and enforcement network, i and other democrats on the committee requested information from the secretary on these matters several times. As the secretarys last appearance before this committee, i asked x. About a letter that we had written to him regarding President Trumps financial ties to russia as well as those of his family members and associates. Secretary did not answer the letter. He was not forthcoming in his testimony. Since then, we have seen the secretary we have sent the secretary two additional follow up letters pertaining to the finances of President Trump, his family members, and his associates as well as his own hand willing of Law Enforcement and regulatory matters that may involve those individuals. The reply that my democratic colleagues and i received from the secretarys staffer just a few days ago did not provide answers to our inquiries and instead encouraged us to go and get the information we requested from other committees with which the treasury provided documents. Despite the fact that the Financial Services committee has cleared jurisdiction over the matters, the secretary seems to think that referring us to other committees is a satisfactory answer to our questions. It is not. Relatedly, im also very concerned about the Trump Administrations inaction on the sanctions passed with broad bipartisan support by congress in 2017 to punish russia for interfearing in our democracy. The Trump Administration has now missed several deadlines related to those sanctions which is unacceptable. Trumps inaction in this area serves to advance the interest of putin, the kremlin, and russian oligarchs to the detriment of the American People. My january 31st levtter to the secretary on this matter has gone unanswered as of yet. Since secretary is here today, it is my sincere hope that he will provide answers to the questions we have on all of these matters. And so with that, mr. Chairman, i will yield back the balance of my time. The chair now recognizes the gentleman from missouri. The chairman of the Financial Institution subcommittee for 45 seconds. Thank you, mr. Chairman. Thank you, mr. Secretary, for being here. We made significant progress on tax and regulatory reform. We must continue to improve the efficiency of the Regulatory Regime that left too many consumers and Small Businesses sitting on the credit sidelines. Im a Firm Believer in the meaningful regulation. At the same time, regulation needs to be responsible and tailored. With regards to risk, for too many years we dealt with federal government that tried to purge all risk from the system. Remain unconvinced that the results of the actions has done much aat all for Financial Stability w regards to fsoc, mr. Secretary, i urge you to use your authority to reregulate and promote Financial Stability through analytical processes. Fsoc needs to become a more thoughtful body. I yield back. Gentleman yields back. The chair recognizes the gentleman from michigan, the vice Ranking Member for one minute. Thank you, chairman and secretary. I appreciate you being here. We havent met. My hometown is flint, michigan. And what happened inexple of wh fail as a society to invest in older industrial cities, those towns that are struggling to make that transition to the next economy. The water crisis in flint is a tragedy that is sadly still on going. It should abe wakeup call for every american, a wakeup call about what happens when we put Balance Sheets ahead of the interest of people. If this administration and your department as well recently attempted to justify changes in our tax code, my implication will hurt many of these communities. The republican passed tax bill, while certainly there are winners and losers, and we could litigate that for the entirety of this hearing, one thing we know for sure is that the changes in the tax code are already being used by the administration and by this congress to justify cuts to programs that are necessary to the revitalization of these already struggling places. That is not acceptable. And theres no way to justify that. What we need in this country is a plan to reinvest and reinvigorate those places. People live there and the implications cannot be overlooked. We cant just focus on the people at the top who are winning without recognizing there are people who will suffer as a result. Zach booker is a fourth generation barber and as well as starting and owning a number of various Small Business as cross my district and west michigan, zach describes himself as a young, hungry for success and continues to strive forever growth. Because of the tax cuts and jobs act that he is actually saying our goals can be extended. Im increasing wages. Im trying to hire more people. Im trying to broaden our reach to serve more customers. Were trying to add more locations. Were trying to buy buildings instead of rent buildings. Zach is a common story. This bill is not just about providing crumbs to the American People. Its helping young entrepreneurs like zach grow our economy and achieve the american dream. We have to make sure they have an opportunity to save and invest. And zach also knows, mr. Secretary, that what is happening on wall street is a technical correction hitting wall street not a fundamental as correction that is hitting main street. Far too long weve been ignoring main street and its time we turn that around. So i appreciate you being here together. Today. And i look forward to supporting these young entrepreneurs like zach. The tichl the gentleman laz expired. We welcome the secretary of the United States secretary of treasury. Secretary is previously testified before our committee. I believe he needs no further introduction. Without objection, the witnesss written statement will be made part of the record. The chair and we are with our hearing amid morning. And the secretary has agreed to stay still 1 30, the couple om aairy three hours for a secretary. Secretary, youre now recognized for five minutes to give an oral presentation of your testimony. Welcome. Thank you very much. Its a pleasure to be here. Chairman, Ranking Member and members of the committee, thank you for inviting me today. One of my Top Priorities is treasury secretary is to sustained Economic Growth for the American People. So im happy to report that the growth of the economy over the past wreer is the high every than the average of the prior 20 years and included two straight quarters of 3 or higher gdp. The president promised robust growth and he is delivering on that promise. Im here today to talk about the Financial StabilityOversight Councils 2017 annual report. This is an important vehicle for providing congress and the public with the councils assessment and recommendations relating to regulatory developments and potential risks in the Financial System. The report emphasizes the importance of Economic Growth to maintaining a resill yenlt Financial System. Since the financial crisis, weve had time to assess the effectiveness of regulatory reforms and consider their unintended consequences. The report recommends that the Council Member agencies address regulatory overlap and duplication, modernize outdated regulations and taylor regulations based on the size and complexity of Financial Institutions. The report discusses a number of risks that the council is monitoring, one i would like to emphasize today is cybersecurity. The Financial Systems heavy and increasing reliance on technology increases the risk that significant cybersecurity incidents could disrupt the Financial Sector and potentially impact u. S. Financial stability. Substantial gains have been made. But i want to emphasize the need for us is stained attention to these risks. The report makes a number of recommendations including the creation of a private Sector Council of Senior Executives in the Financial Sector to collaborate with regulators in order to mitigate cyberSecurity Risks. Turning to our growth policies, the tax cut and jobs act passed last year was our top priority. In this overhaul of the tax code is already having a positive impact. Because of tax reform, over three million americans have received special bonuses or other benefits and over 300 companies have announced investments in the workforces. Companies are announcing higher wages and increased benefits, employee training, infrastructure and research and development. These investmentes will lead to long term prosperity as well as companies to bring back cash from overseas, our economy will continue to grow. Let me now turn to some specific priorities. I want to comment you for work on financial regulatory reform. We appreciate the work of this committee and the house of representatives. To advance the cause of reform bypassing hr10, financial choice act and dozens of strongly bipartisan bills. This legislation reflects manufacture treasuries recommendations from our executive order reports released last year. I encourage the senate and house to Work Together to move this legislation as quickly as possible. The period would last unwilling february 28th. I urge them to protect the full faith of the United States by increasing the statutory debt limit as soon as possible. The house and senate have been working towards modernization of the committee on Foreign Investment and the United States. I support the Foreign Investment risk review modernization act and applaud senators corn in, feinstein and berr and heck for leadership on this issue. A modernized plan will enable us to protect our National Security. I look forward to working with congress. One of treasuries Core Missions is to safeguard the national by using powerful economic tools. We will continue to take frequent and on going actions to combat threats from malicious actors. These includes terrorist groups, human right abusers, cyber criminals, and rogue regimes like north korea, iran, and venezuela. We continue to review intelligence to identify targets with maximum impact, deny them access to the u. S. And International Financial system, disrupt the Revenue Streams and ultimately pressure for a change in behavior. As youre aware, last week the Treasury Department submitted a series of reports and compliance with sanctions legislation. These reports represent another chapter