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The Senate Committee on Banking, Housing, and Urban Affairs today met to revisit the nominations of Jerome Powell as Chairman of the Board of Governors of the Federal Reserve System and Brian Montgomery as Assistant Secretary for Housing – Federal Housing Commissioner, U.S. Department of Housing and Urban Development. Both nominees were advanced to the full Senate for a confirmation vote.
Both nominees previously received yes votes from the Banking Committee late last year, but as the full Senate did not get around to confirming them before going into recess, the Banking Committee had to revote this morning.
Powell was approved with a voice vote, with Sen. Elizabeth Warren (D-Massachusetts) asking to be recorded as a no.
Montgomery was approved with a voice vote, with Sen. Warren, Sen. Cortez Mastro (D-Nevada), and Sen. Jack Reed (D-Rhode Island) asking to be recorded as "no."
The Committee also approved the nomination of Randal Quarles for a full term on the Fed's board. Sen. Warren, Sen. Cortez Mastro, and Sen. Reed were recorded as "no" for Quarles as well.
If confirmed by a full Senate vote, Powell will succeed current Fed chair Janet Yellen, who announced her retirement from the Fed’s Board of Governors in early November, following Powell’s nomination as Fed Chair by President Trump. During questioning by the Senate Banking Committee in November 2017, Powell emphasized the importance of looking back over the various regulations and legislation instituted since the 2008 financial crisis and making sure it still makes sense. In response to questioning by Senator Elizabeth Warren (D-Massachusetts), who asked if Powell believed there were any regulations that needed to be stronger, Powell said, “Honestly, Senator, I think they’re tough enough.”
Powell said the Fed would continue to err on the side of caution, but added that “it doesn’t help anyone for banks to waste money.” Powell also said at the time that he was in favor of exempting banks worth less than $10 billion from the Volker Rule, which limits risky trading by U.S. banks, and that he would work to continue shrinking the Fed's balance sheet, predicting an eventual balance sheet total of between $2.5 and $3 trillion could be achieved within three to five years.
Powell also highlighted the importance of tailoring regulations to the size and importance of the institution in question, with a decrease in intensity and stringency for smaller and regional banks. However, Powell pointed out that “Fundamentally, size is only one indicator of the riskiness of a firm and the possibility of it damaging the financial system through its failures.”
Brian Montgomery is currently Vice Chairman of The Collingwood Group, a Washington D.C.-based advisory firm that he co-founded, and he previously served as Federal Housing Administration commissioner under former President George W. Bush. In a letter sent to Senate Banking Committee Chairman Crapo and Ranking Member Brown endorsing his nomination and encouraging his confirmation, Ed Delgado, President and CEO of the Five Star Institute wrote:
During my 25 year tenure working within the mortgage banking industry, I have had the opportunity to work side by side with Mr. Montgomery during his times within both public and private service on issues that face the American homeowner,” the letter said. “I can attest to his qualifications as a leader and his devotion to the cause of furthering responsible homeownership in the United States. An examination of Mr. Montgomery’s record will reveal a dedicated public servant and champion for homeownership, fully committed to ensuring the American Dream lives on for generations to come.
During his October testimony before the Senate Committee on Banking, Housing, and Urban Affairs, Montgomery said, “Some of my Republican friends and colleagues still ask why I agreed to serve in a Democratic Administration and my answer has always been the same: they asked for my help. It was that simple. Now when I’m asked why I would want to return to HUD, the answer is just as simple: I believe I can make a positive difference."
