Senators Introduce Bipartisan Bill to Boost Wildfire Hazardous Fuels Reduction Projects

Source: United States Senator for California – Dianne Feinstein

Washington—Senators Dianne Feinstein (D-Calif.), Susan Collins (R-Maine), Jeanne Shaheen (D-N.H.) and Mark Kelly (D-Ariz.) today introduced the Community Wood Facilities Assistance Act, legislation to support the development of facilities that make use of low-value timber from wildfire hazardous fuels reduction projects.

A companion bill was introduced in the House of Representatives in March by Representatives Marie Gluesenkamp Perez (D-Wash.), Chellie Pingree (D-Maine), Dan Newhouse (R-Wash.) and Annie Kuster (D-N.H.).

“Addressing the problem of wildfires require a multi-faceted approach, including removing some small trees and other hazardous fuels. Congress has provided billions of dollars for this work through the bipartisan infrastructure law and the Inflation Reduction Act. Our legislation will help maintain this momentum by making it easier to develop sustainable wood and energy projects, strengthening our rural economies and making our forests healthier at the same time,” Senator Feinstein said.

“Throughout Maine’s history, our forest products industry has helped drive local economies and sustain rural communities. As the economy changes, this vital industry is evolving to meet the challenges of the 21st century,” said Senator Collins. “Our bill would make improvements to the Forest Service’s Community Wood Energy and Wood Innovations Grant Program, which helps to promote innovative uses for wood products.”

“The Community Wood Energy and Wood Innovations Grant Program supports the forest products industry, which is crucial to the stewardship of our state’s forests and economic vitality of rural Granite State communities,” said Senator Shaheen. “I’m pleased to reintroduce this legislation with a bipartisan group of Senators to help strengthen this vital program, promote innovation in the forest products industry and create new jobs. I urge my colleagues to support this commonsense legislation that will make a real difference for our forest communities.”

“The West needs every tool possible to reduce the risk of catastrophic wildfire. By funding innovative uses of timber left over from foresting thinning projects, our bipartisan legislation would support wildfire mitigation and create jobs across northern Arizona,” said Senator Kelly.

The Community Wood Facilities Assistance Act would:

  • Revise the U.S. Forest Service’s Community Wood Energy and Wood Innovations Grant Program by:
    • Allowing grants to be used for the construction of new facilities, in addition to making improvements to existing facilities
    • Increasing the authorization from $25 million to $50 million
    • Increasing the maximum grant per facilities from $1 million to $5 million
    • Increasing the federal cost-share from 35 percent to 50 percent
    • Increasing maximum size for community wood energy systems eligible for grant funding from 5 megawatts to 15 megawatts
    • Change the program name to the Community Wood Facilities Grant Program to avoid confusion with the similarly named Wood Innovations Grant Program
  • Revise the U.S. Forest Service’s Wood Innovations Grant Program by:
    • Allowing grants to be used for the construction of new facilities, in addition to making improvements to existing facilities
    • Reduce the minimum non-federal cost-share from 50 percent to 33 percent

###

HYDE-SMITH REINTRODUCES ‘GRIP ACT’ TO BLOCK STATE GUN REGISTRIES

Source: United States Senator Cindy Hyde-Smith (R-Miss)

HYDE-SMITH REINTRODUCES ‘GRIP ACT’ TO BLOCK STATE GUN REGISTRIES
 
Legislation Would Ensure Federal Dollars Aren’t Used to Keep Registries of Lawful Gun Owners

WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) today reintroduced her legislation to prohibit states, localities, or any other organization from using federal funding to maintain gun registries.

The Gun-owner Registration Information Protection (GRIP) Act would clarify existing law that prohibits the use of any federal funding by states or local entities to store or list sensitive, personal information related to the legal ownership or possession of firearms.

“The GRIP Act is needed now more than ever as more anti-gun and anti-violence proposals too often end up infringing on the Second Amendment rights of law-abiding gun owners,” said Hyde-Smith, who first introduced the GRIP Act in the 116th Congress.

“The GRIP Act would ensure that states and cities comply with federal statutes that specifically prohibit the use of federal funds to keep gun registries, which can then be used to target people who own or purchase firearms legally,” the Senator added.

While current law prevents the federal government from storing information acquired during the firearms background check process, the GRIP Act would ensure the federal government does not support, either intentionally or otherwise, state or local efforts to collect and store personally identifiable information related to legal firearm purchases and ownership.

The bill also clarifies that states and local entities cannot use federal grant funds from programs, such as the National Criminal Histories Improvement Program, NICS Amendment Records Improvement Program, or the Edward Byrne Memorial Justice Assistance Grant Program, to create or maintain full or partial gun registries.  It would not limit states’ recordkeeping for permitting, law enforcement-issued firearms, or lost or stolen firearms.

Original cosponsors Hyde-Smith’s measure include Senators Bill Cassidy, M.D. (R-La.), Kevin Cramer (R-N.D.), Cynthia Lummis (R-Wyo.), Roger Wicker (R-Miss.), Pete Ricketts (R-Neb.), Bill Hagerty (R-Tenn.), Mike Braun (R-Ind.), Mike Rounds (R-S.D.), and Steve Daines (R-Mont.).  U.S. Representative Paul Gozar (R-Ariz.) will introduce companion legislation in the House.

National Rifle Association, Gun Owners of America, National Association for Gun Rights, and Constitutional Sheriffs and Peace Officers Association endorse the GRIP Act.

A GRIP Act one-page summary is available here.

###

Thune-Moran Bill Would Address Affordable Housing Shortage

Source: United States Senator for South Dakota John Thune

WASHINGTON — U.S. Sens. John Thune (R-S.D.) and Jerry Moran (R-Kan.) today reintroduced the Housing Supply Expansion Act, legislation that would address the shortage of affordable housing options across the nation by making targeted reforms to requirements under the Davis-Bacon Act, a 1930s-era labor law. These reforms would reduce labor costs and administrative burdens on residential construction contractors, which would free up capital that could be redirected toward building additional affordable housing.
“Affordable housing shortages directly affect prospective homebuyers and renters, but they also impact small businesses that are trying to overcome pressing workforce needs,” said Thune. “I continue to hear about this issue from folks across South Dakota, and I’m proud to lead this common-sense legislation that would reform archaic requirements in the Davis-Bacon Act, cut through its overly-burdensome red tape, and increase the supply of affordable housing.”
“Purchasing a home is a part of the American dream that is currently out of reach for many families,” said Moran. “Reducing the burden of federal regulations will help homebuilders meet the demand for new homes, making homeownership a reality for more Kansans.”
“NAHB commends Senators Thune and Moran for introducing this bill, which will help lower housing costs by streamlining and modernizing Davis-Bacon prevailing wage requirements,” said Alicia Huey, chairman of the National Association of Home Builders. “A recent Berkley study found that prevailing wage requirements raise construction costs by more than $30 per square foot. This means that current Davis-Bacon requirements are increasing construction costs by an at least $27,000 for an average 900 square foot apartment, which ultimately translates into higher rents. To solve the housing affordability crisis affecting our communities, Congress needs to look at all the factors driving up housing costs. The nation’s home builders strongly support this legislation.”
“The Mortgage Bankers Association commends Senators Thune and Moran for taking action to improve and encourage access to quality affordable housing,” said Bill Killmer, senior vice president of legislative and political affairs at the Mortgage Bankers Association (MBA). “The improper application of Davis-Bacon wage rates is an unnecessary barrier to the modernization and development of multifamily housing, and this bill will help reduce the administrative burden and complexity for residential housing projects. MBA will continue to advocate on behalf of policies that both ensure a healthy real estate market and provide consumers with sustainable housing choices.”
Enacted in 1931, the Davis-Bacon Act requires construction contractors involved in certain federally funded or federally assisted construction contracts, like those participating in various federal housing programs, to pay individuals working on the contract at least the prevailing wages of the vicinity in which the construction project is located. The Davis-Bacon Act – as it stands – can disincentivize the construction of affordable housing due to the high costs it places on construction contractors and the administrative burden that accompanies it. The U.S. Department of Labor (DOL) sets these prevailing wage rates by reviewing data submitted by construction contractors through voluntary surveys, which can be, at times, inaccurate or inconsistent. Last year, DOL initiated a rulemaking that would revise certain tenets of the Davis-Bacon Act.  

Murphy, Hagerty Introduce Legislation to Target Deadly Fentanyl Before It Reaches U.S. Border

Source: United States Senator for Connecticut – Chris Murphy

May 18, 2023

WASHINGTON–U.S. Senators Chris Murphy (D-Conn.) and Bill Hagerty (R-Tenn.), both members of the U.S. Senate Foreign Relations Committee, on Thursday introduced bipartisan legislation to tackle the fentanyl crisis by addressing critical pieces of the fentanyl supply chain before the finished product enters the U.S. The Combatting Fentanyl Trafficking from China and Mexico Act would target actors in Mexico and China involved in the production and transit of fentanyl to the U.S. through a combination of sanctions and incentives.

According to the Centers for Disease Control and Prevention (CDC), in less than a decade, the number of deaths attributed to synthetic opioids (of which fentanyl accounts for 90%) has increased by nearly 200% — from roughly 65 people a day to 192 people a day. In 2021, 70,000 American lives were lost to the fentanyl crisis. Before this low-cost, highly potent drug enters the United States, precursor chemicals are shipped from China to Mexico where cartels use those chemicals to manufacture the fentanyl that is then illegally moved across the border and sold.

“Fentanyl is devastating our communities, and we can’t wait until it gets to America to take action. That’s why I’m teaming up with Senator Hagerty on bipartisan legislation to disrupt the early stages of the fentanyl trade. We can do so much more to stop the chemical components of illegal fentanyl from getting into the supply chain, meaning these substances have a lower chance of ever reaching the southern border. Our bill would ensure that stopping the flow of fentanyl into the U.S. takes a higher priority in our relationships with Mexico and China and equips the administration with new tools to help secure their cooperation,” said Murphy.

“The rise in fentanyl overdose deaths affects every state—it’s not a partisan issue, and finding a solution shouldn’t be either,” said Hagerty. “That’s why I’m pleased to partner with Senator Murphy on this legislation targeting the flow of fentanyl before it gets to our southern border by pressuring Mexico and China to crackdown on this deadly trade and imposing sanctions against entities in those countries that facilitate fentanyl production and trafficking.” 

Specifically, the Combatting Fentanyl Trafficking from China and Mexico Act would:

  • Require the State Department to strengthen efforts between the U.S. and Mexico to combat fentanyl production, pursue prosecution of transnational criminal organizations involved in the trade, reduce the number of illicit firearms crossing the border, and provide assistance to Mexico to strengthen relevant law enforcement agencies;
  • Authorize targeted sanctions on Chinese individuals and companies involved in the fentanyl trade;
  • Authorize the lifting of sanctions on designated entities in China if significant progress is made on countering fentanyl;
  • Publicly designate airports, ports and states in Mexico that are major transit sites for fentanyl and fentanyl precursors;
  • Authorize additional assistance to Mexico if significant progress on countering fentanyl is made.

Earlier this month, Murphy chaired a U.S Senate Appropriations Subcommittee on Homeland Security hearing on transnational criminal organizations (TCOs) with officials from U.S. Customs and Border Protection (CBP) and Homeland Security Investigations (HSI). Murphy also proposed potential investments at the U.S. Department of Homeland Security (DHS) to tackle the fentanyl crisis. In February, Murphy discussed both Mexico and China’s role in fentanyl trafficking at a U.S. Senate Foreign Relations Committee hearing.

Earlier this year, Murphy traveled with a bipartisan, bicameral congressional delegation to Mexico City where he met with President of Mexico Andrés Manuel López Obrador to discuss how the U.S. and Mexico can work together stem the flow of fentanyl into the U.S. and gun trafficking from the U.S. into Mexico.

###

Senate Backs the Blue, Rejects Anti-Police Radicalism

Source: United States Senator for Kentucky Mitch McConnell

WASHINGTON, D.C.U.S. Senate Republican Leader Mitch McConnell (R-KY) delivered the following remarks today on the Senate floor regarding crime:

“As our nation observes Police Week, cities across America continue to grapple with a rising tide of violent crime. And our nation’s capital is no exception.

“This year, Washington has already endured the deadliest first four months of any year in the last decade.

“Motor vehicle theft in the District is already up 115% from this time last year.

“And now, the left-wing D.C. Council wants to make the tough job facing the brave men and women of the Metropolitan Police even tougher.

“With violent crime spiraling out of control, the Council proposed a law that would strip police officers of collective bargaining rights, make more of their personal information available for public harassment, and add new hurdles for the use of force in defending themselves and the public.

“Remember, Congress already had to step in when the Council tried to go even softer on felony sentencing with another bill earlier this year. Even President Biden balked at such a radical measure.

“This latest law, which is already in effect on an emergency basis, has had a devastating impact on local law enforcement. The local police union reports 1,200 officers have chosen to leave the force since it took effect.

“In a city that’s facing its worst bout of violent crime in at least a decade, the police chief estimates he has fewer officers to fight it than at any time since the 1970s!

“To make matters worse, the Department is fighting a losing battle against the city’s soft-on-crime prosecutors. Last year, Washington’s U.S. Attorney’s Office declined to press charges on two-thirds of the arrests made by MPD. In other words, two out of every three times an MPD officer risks their safety to take a suspect into custody, the suspect walks free.

“No wonder, as Chief Contee reports, the average homicide suspect the Department encounters already has a rap sheet of 11 previous arrests. Left-wing officials in our nation’s capital are taking a cue from Washington Democrats’ approach to border security: catch-and-release.

“It’s unacceptable. But this Police Week, the junior Senator from Ohio brought forward a resolution to say enough is enough.

“After a bipartisan vote in the House, our colleagues on both sides of the aisle voted yesterday to reject the D.C. Council’s new law.

“I’m grateful to Senator Vance for his leadership. And I’m proud to join colleagues in continuing to back the blue.”

U.S., Allies Must Equip Ukraine to Win

Source: United States Senator for Kentucky Mitch McConnell

WASHINGTON, D.C.U.S. Senate Republican Leader Mitch McConnell (R-KY) delivered the following remarks today on the Senate floor regarding Ukraine:

“This week, some of America’s closest European allies have continued preparations to equip Ukraine with new weapons ahead of a planned counteroffensive, including long-range cruise missiles and American-made fighter aircraft that would require authorization from the United States.

“As President Biden meets in Japan with our strongest economic partners, I hope he will build on the West’s support for Ukraine by clearing the way for the transfer of F-16s, long-range fires, and cluster munitions that will help Ukraine win.

“As Ukraine prepares to liberate territory from Russian occupation, its friends must move at the speed of relevance to approve the transfer of critical weapons and munitions to help these efforts succeed.”

President Biden’s Inflation Still Hammering Americans Two Years Later

Source: United States Senator for Kentucky Mitch McConnell

WASHINGTON, D.C.U.S. Senate Republican Leader Mitch McConnell (R-KY) delivered the following remarks today on the Senate floor regarding inflation:

“Last week’s inflation report reinforced what working families across America already know: Washington Democrats’ inflation is still packing a punch.

“Prices climbed 4.9 percent from this time last year. Just in the last month, they accelerated nearly half a percentage point.

“The Biden Administration called the news, ‘welcome breathing room for families.’

“Welcome breathing room? According to the latest data, families have paid thousands of dollars more just to put food on their tables on his watch.

“In Colorado, your average family has paid over $2,000 in additional food costs since 2021.

“In Arizona, those same groceries have cost households $1,800. In Montana, over $1,700.

“And in my home state of Kentucky, families have paid $1,600 more on average since President Biden took office.

“This doesn’t sound like breathing room. Especially at a time when workers’ wages are failing to keep pace with out-of-control prices.

“Meanwhile, confidence in President Biden to do the right thing with the economy is at its lowest point since the Great Recession. That’s hardly surprising when his top economic advisers refuse to even admit there’s a problem.

“The President’s latest pick to lead his Council of Economic Advisors has repeatedly said this Administration didn’t miss a thing on inflation.

“So, while the Biden Administration pats itself on the back for a job well done, let’s remember where we were just two years ago.

“Since the President took office, prices have climbed a staggering 16%.

“Gasoline is up 54%. Electricity is up 22%. Groceries are up 20%. And higher interest rates are making it harder for working families to borrow and save for the future.

“Washington Democrats’ reckless spending and green energy fantasies are sending our economy deep into the red.

“For two years straight, Americans have had to tighten their belts just to get by. It’s time for this Administration to wake up and do the same.”

Young, Colleagues Reintroduce Bill to Cut Burdensome Regulations, Increase Housing Opportunities for Americans

Source: United States Senator for Indiana Todd Young

May 18, 2023

WASHINGTON – U.S. Senators Todd Young (R-Ind.) and Brian Schatz (D-Hawai’i) reintroduced the Yes In My Backyard (YIMBY) Act to shed light on discriminatory land zoning policies, encourage localities to cut burdensome regulations, and bring a new level of transparency to the community development process.

Instead of adopting inclusive land use policies that allow citizens of all income levels, backgrounds, and identities to live, work, and flourish in their city or town, some communities are building paper walls of regulations that negatively affect and sometimes discriminate against low- and middle-income Americans. In the midst of a nationwide housing affordability crisis, this legislation would ensure localities do their part to make housing more affordable for everyone.

“Discriminatory local zoning and land use policies drive up housing costs in communities across America,” said Senator Young. “These policies exacerbate the housing affordability crisis and stifle the ability of Americans to move to areas of opportunity. My legislation will require cities, towns, and rural areas across America to face this reality under a new level of transparency and encourage them to cut these harmful regulations.”

“In order to reverse anti-housing policies, we need to know where they are in place and how they hurt communities. Our bill will provide HUD and the public with more transparency on policies that are stopping much-needed housing from being built,” said Senator Schatz.

U.S. Representatives Derek Kilmer (D-WA-6) and Mike Flood (R-NE-1) introduced the House companion bill.

“Our nation had challenges with housing before the pandemic – and those challenges have only grown since then. We need more workforce housing, more senior housing, more homeless housing, and more affordable housing. We need more housing units, period,” said Representative Kilmer. “That’s why I’m leading bipartisan legislation in the House to help communities in our region and across the country reduce barriers to construction and build more homes that folks can afford.”

“Affordable housing is a top issue for many communities across the country. The Yes in My Backyard Act will help boost America’s housing supply and strengthen the Community Development Block Grant program, which has served our country well for many years. It’s an honor to help lead this bipartisan effort to keep housing costs down for working American families,” said Representative Flood.

Specifically, the YIMBY Act would require Community Development Block Grant recipients to report on whether they have already adopted certain anti-discriminatory land use policies and/or to submit a plan for implementing said policies and the ways in which adopting the policy would benefit the jurisdiction. Some of the policies encouraged by the bill, include enacting high-density single-family and multifamily zoning, allowing manufactured homes in areas zoned primarily for single-family residential homes, reducing minimum lot size, and allowing single-room occupancy development wherever multifamily housing is allowed.

This requirement would provide more transparency for citizens, lawmakers, academics, and others to understand and in some cases, critique, a community’s rationale for not adopting anti-discriminatory housing policies. By using this approach, the bill avoids encroaching on the rights of states and localities to set zoning policies, but conditions federal funds on transparency about their rationale when choosing not to remove or reform harmful land use regulations.

Mike Kingsella, CEO of Up for Growth Action, said, “Despite a decade of economic growth, the American housing crisis has worsened, falling 3.8 million homes short of demand. The YIMBY Act, led by Senators Todd Young and Brian Schatz, is an innovative response. It fosters policy transparency and encourages pro-housing initiatives without imposing rigid mandates. This Act clears the way for affordable, equitable, and sustainable communities. Up for Growth Action urges Congress to endorse the YIMBY Act, saying ‘yes’ to housing.”

Bob Pinnegar, President and CEO of the National Apartment Association, said, “Hard-working Americans deserve a real solution to housing affordability challenges, like the bi-partisan YIMBY Act. The National Apartment Association is proud to support this important bill, which will help ease our nation’s affordability crisis and spur construction of much-needed affordable and market based housing. Sens. Young (R-Ind.) and Schatz (D-Hawaii) and Reps. Killmer (D-WA-06) and Flood (R-NE-01) have demonstrated tremendous leadership on this issue and their hard work will help expand affordable housing options in communities nationwide.”

Brent Gardner, Chief Government Affairs Officer for Americans for Prosperity, said, “Life has become more unaffordable for all Americans and for years local governments have unnecessarily created barriers that restrict supply and artificially inflate the cost of housing. AFP welcomes the introduction of the bipartisan Yes in My Backyard Act to help ensure that governments identify and assess regulations that block individuals and families from accessing housing and using land in the way that most benefits them.”

For the full bill text, click here.

Background:

Senator Young first introduced the Yes In My Backyard Act in 2019 and reintroducedthe legislation in 2021. Following the 2021 reintroduction, the YIMBY Act was selectedby the National Taxpayers Union for their 11th Annual No Brainers List as a bipartisan, common-sense solution to a problem facing taxpayers.

Cortez Masto, Murray, Hirono Introduce Legislation to Protect Affordable Over-the-Counter Birth Control

Source: United States Senator for Nevada Cortez Masto

May 18, 2023

Washington, D.C. – Today, U.S. Senator Cortez Masto joined U.S. Senators Patty Murray (D-Wash.) and Mazie Hirono (D-Hawaii) in re-introducing the Affordability is Access Act, legislation to ensure that women across the country have affordable access to FDA-approved over-the-counter (OTC) birth control without a prescription.

“Women’s reproductive freedoms are under attack across the country, and we know that far-right extremists won’t stop at limiting a woman’s right to make decisions about her own body,” said Senator Cortez Masto. “It is essential that we put policies in place now that will provide timely access to over-the-counter birth control once approved by the FDA. Comprehensive coverage for contraception will help thousands of Nevada women stay healthy and in control of their own lives. I’m proud to reintroduce this legislation and will keep fighting for women’s rights.”

“We are here today to make sure women can get the birth control they need—and can get it without having to pay extra, ask permission, or jump through ridiculous hoops,” said Senator Murray. “We are here to make sure that when birth control is available to everyone over the counter, it is also affordable for everyone. Because affordability IS access. And today, we are closer than ever to over-the-counter birth control. This is so important—especially in this post-Roe nightmare when far-right Republicans across the nation are rolling back reproductive rights, pushing radical and dangerous abortion bans, and making clear they are coming for birth control next.”

“At a time when Republicans across the country are fighting to ban abortion nationwide—bans that disproportionately harm people of color, people with low incomes, and LGBTQ people—it is critical that we ensure every person who needs it can access and afford contraception,” said Senator Hirono. “That FDA advisory panel vote to approve the first ever over-the-counter birth control application is a historic step forward in the fight to expand access to birth control, and I hope the FDA will act without delay to accept the panel’s recommendation. But as we know, access alone without affordability is not true access. That’s why we need to pass this legislation to help ensure everyone who needs it can access birth control, regardless of their income.”

The Affordability is Access Act would ensure that once the U.S. Food and Drug Administration (FDA) approves routine, daily use of oral birth control without a prescription, private health insurance plans are required to  cover over-the-counter birth control without any out-of-pocket costs to the patient. This bill addresses the reality that for many women—especially those with the tightest budgets—true access requires affordability.

  • Ensure coverage of all contraception that the FDA has approved or regulated for routine, daily use without a prescription.
  • Maintain the FDA’s sole authority to determine the safety and efficacy of drugs and make them available over-the-counter without a prescription. 
    • Entities that research and develop contraceptives must apply to the FDA for review and approval for sale without a prescription.
    • Upon the receipt of such an application, the FDA must determine whether the contraceptive product meets the rigorous safety, efficacy, and quality standards for over-the-counter use, as established by the Federal Food, Drug, and Cosmetic Act.
    • If the product meets these standards, the FDA should approve the application without delay.
  • Require retailers to provide OTC contraception without a prescription. 
    • The Affordability is Access Act states that any retailer that stocks contraception that the FDA has approved or regulated for routine, daily use without a prescription may not interfere with a consumer’s access to or purchase of such contraception.

Read full text of the Affordability is Access Act here.

Senator Cortez Masto has been fierce advocate for women’s reproductive rights. After the Supreme Court overturned Roe v. Wade, Senator Cortez Masto introduced the Freedom to Travel for Health Care Act to ensure legal protections for women traveling across state lines to receive reproductive care. She has urged the Federal Trade Commission (FTC) to protect the data privacy of women seeking reproductive health care and introduced legislation to make sure women across the country have access to affordable over-the-counter birth control. Just last month she took on one of the nation’s biggest pharmaceutical wholesalers to ensure Nevadans can access the abortion pill in retail pharmacies, including Walgreens.

  ###



VIDEO RELEASE: Sen. Menendez Presses Federal Financial Regulators on Executive Accountability and Supervision Following Recent Bank Failures

Source: United States Senator for New Jersey Bob Menendez

WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, today pressed federal financial regulators during an oversight hearing on their efforts to ensure greater executive accountability and effective supervision in the wake of recent bank failures.

The Senator noted that Michael Barr, the Federal Reserve Vice Chair for Supervision, identified in his recent report major weaknesses in Silicon Valley Bank’s incentive compensation program, noting that it encouraged excessive risk taking to maximize short-term financial metrics and did not adequately reflect longer-term performance, nonfinancial risks, or unaddressed audit or supervisory issues.

“As I noted in our hearing with the executives on Tuesday, the incentive structure SVB put in place rewarded breakneck growth and profitability, while kneecapping efforts to manage growing risks to the firm,” said Sen. Menendez.

[CLICK HERE TO WATCH THE SENATOR’S REMARKS]

The Senator pointed out that financial regulators have been slow to develop and swiftly implement a strong incentive-based compensation rule – a rule that is required under Dodd-Frank and is now more than 10 years overdue – that could have helped in preventing the situation we saw at SVB.

“I have a sense, having sat through the Great Recession, almost the financial collapse, listening to all we were asked to do as members of the Banking Committee back then. When we pass things, we seem to get it vetoed by omission,” added Sen. Menendez. “Which means maybe the regulators don’t like what we say, but it’s the law. And then nothing happens. A decade – a decade! At some point, gentlemen, you have responsibility. So, I hope you’ll get to that quickly.”

The Senator also highlighted how Vice Chair Barr’s report on the supervision of SVB revealed that Fed examiners gave the bank’s management satisfactory ratings even after supervisors began identifying and communicating issues with governance and risk management in 2018. The Federal Reserve continued awarding management satisfactory ratings despite identifying significant concerns year after year. He questioned why regulators appear reluctant to downgrade bank ratings to reflect their performance.

“To me, this shows that Fed examiners fundamentally misunderstood their role in enforcing a safe and sound banking system,” concluded Sen. Menendez. “Your job is to identify risks proactively and ensure they are fixed before they impact performance, since we’ve seen time and again that the banks themselves do a poor job of it.”

At the end of his line of questioning, Sen. Menendez secured commitments from Vice Chair Barr to sharpen the focus of the Federal Reserve’s supervisory efforts in order to proactively identify and ensure banks fix vulnerabilities.

In late March, Sen. Menendez led a bipartisan group of Senate Banking colleagues in pressing Federal Reserve Chair Jerome Powell on the agency’s use of enhanced supervision and prudential standards for SVB. He also signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of Silicon Valley Bank’s purportedly selling millions of dollars’ worth of company stock in the days and months leading up to SVB’s failure.

In response to the recent bank failures, Sen. Menendez joined dozens of Senate and House colleagues to introduce the Secure Viable Banking Act, legislation that would repeal Title IV of S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, and increase prudential standards for banks similar to Silicon Valley Bank and Signature Bank. Sen. Menendez is a longtime advocate for prudent financial regulation, and was outspoken about the dangers of passing S.2155 five years ago, which reduced critical oversight and capital requirements for large banks.

###