CongressionalHearings/Dodd-Frank/CHRG-111shrg51303/CHRG-111shrg51303--16.txt They are the ones that created the systemic risk , and that systemic risk rolled through the operating companies , including causing the run that you described , Senator , on the securities lending business . CongressionalHearings/Dodd-Frank/CHRG-111shrg52619/CHRG-111shrg52619--175.txt As FDIC Chairman Sheila Bair recently told the states ' Attorneys General , `` if ever there were a time for the states and the feds to work together , that time is right here , right now . CongressionalHearings/Dodd-Frank/CHRG-111shrg56415/CHRG-111shrg56415--246.txt State credit union regulators are cognizant of credit unions ' future financial performance as commercial credit problems begin to affect consumer credits . CongressionalHearings/Dodd-Frank/CHRG-111shrg56415/CHRG-111shrg56415--246.txt Small and medium-sized financial institutions hold a significant dollar amount of commercial real estate loans on their balance sheets . CongressionalHearings/Dodd-Frank/CHRG-111hhrg54872/CHRG-111hhrg54872--28.txt Thank you , Mr. Chairman , Ranking Member Bachus , and members of the Committee on Financial Services for inviting us here today . CongressionalHearings/Dodd-Frank/CHRG-111hhrg54872/CHRG-111hhrg54872--28.txt Mr. Chairman , it is our belief that a strong CFPA will go a long way towards addressing the very real needs of enforcement and regulation in the financial services arena . CongressionalHearings/Dodd-Frank/CHRG-111shrg54789/CHRG-111shrg54789--187.txt If a financial institution developed a new product today , under the CFPA Act that product could be offered in the market tomorrow -- the CFPA will not be approving financial products . CongressionalHearings/Dodd-Frank/CHRG-111shrg53085/CHRG-111shrg53085--213.txt First , federal bank regulators are n't well-suited to address conduct issues of operating subsidiaries of national banks in local and state markets . CongressionalHearings/Dodd-Frank/CHRG-111shrg53085/CHRG-111shrg53085--213.txt --------------------------------------------------------------------------- The Financial Product Safety Commission would not remove the obligation on existing regulators to ensure compliance with current laws and regulations . CongressionalHearings/Dodd-Frank/CHRG-111shrg51303/CHRG-111shrg51303--178.txt In fact , the holding company provided a guarantee of first $ 500 million , then $ 1 billion and finally $ 5 billion . CongressionalHearings/Dodd-Frank/CHRG-111shrg51303/CHRG-111shrg51303--178.txt I have read a number of times statements that the New York State Insurance Department is the primary regulator of AIG . CongressionalHearings/Dodd-Frank/CHRG-111shrg56262/CHRG-111shrg56262--91.txt --------------------------------------------------------------------------- The Federal Reserve 's 2008 rule for higher-cost loans accomplished part of this goal , \ 14 \ but all loans need protection , not just subprime loans . CongressionalHearings/Dodd-Frank/CHRG-111shrg56262/CHRG-111shrg56262--91.txt Transparency -- The SEC should require securitizers to provide investors with all of the loan-level data they need to assess the risks involved . CongressionalHearings/Dodd-Frank/CHRG-111shrg56415/CHRG-111shrg56415--83.txt These developments have raised the number of problem banks to the highest level since the early 1990s , and the rate of bank and thrift failures has accelerated throughout the year . CongressionalHearings/Dodd-Frank/CHRG-111hhrg52400/CHRG-111hhrg52400--20.txt The backbone of the industry 's financial strength is the State-imposed reserve requirements , and specifically the contingency reserve . CongressionalHearings/Dodd-Frank/CHRG-111shrg54675/CHRG-111shrg54675--89.txt Mr. Hopkins and Mr. Johnson , both of your institutions are members of the Federal Home Loan Bank system . CongressionalHearings/Dodd-Frank/CHRG-111shrg51290/CHRG-111shrg51290--67.txt Federal Law Following deregulation of home mortgages in the early 1980 's , disclosure became the most important type of Federal mortgage regulation . CongressionalHearings/Dodd-Frank/CHRG-111shrg51290/CHRG-111shrg51290--67.txt Coming out of the recession of 2001 , interest rates fell and there was a massive securitization boom through refinancing that was fueled by low interest rates . CongressionalHearings/Dodd-Frank/CHRG-111shrg54675/CHRG-111shrg54675--83.txt Credit Card Accountability , Responsibility and Disclosure Act CUNA supports the intent of the CARD Act to eliminate predatory credit card practices . CongressionalHearings/Dodd-Frank/CHRG-111shrg51303/CHRG-111shrg51303--174.txt State insurance authorities of AIG 's regulated insurance subsidiaries participating in the securities lending program supported the Board 's action . CongressionalHearings/Dodd-Frank/CHRG-111shrg51303/CHRG-111shrg51303--174.txt AIG is the leading commercial insurer in the United States , providing insurance to approximately 180,000 small businesses and other corporate entities , which employ approximately 106 million people in the United States . CongressionalHearings/Dodd-Frank/CHRG-111shrg51303/CHRG-111shrg51303--174.txt PREPARED STATEMENT OF DONALD KOHN Vice Chairman , Board of Governors of the Federal Reserve System March 5 , 2009 Chairman Dodd , Ranking Member Shelby , and other Members of the Committee , I appreciate having this opportunity to discuss the role of the Federal Reserve in stabilizing American International Group , Inc. -LRB- AIG -RRB- . CongressionalHearings/Dodd-Frank/CHRG-111hhrg48874/CHRG-111hhrg48874--16.txt Mr. Polakoff , '' Good morning , Chairman Frank , Ranking Member Bachus , and members of the committee . CongressionalHearings/Dodd-Frank/CHRG-111shrg51395/CHRG-111shrg51395--117.txt \ 22 \ In addition , rating structured finance products generated much higher fees than rating similar amounts of corporate bonds . CongressionalHearings/Dodd-Frank/CHRG-111shrg51395/CHRG-111shrg51395--117.txt See Testimony of SEC Chairman Christopher Cox before the Committee on Banking , Housing and Urban Affairs , United States Senate , September 23 , 2008 . CongressionalHearings/Dodd-Frank/CHRG-111shrg56415/CHRG-111shrg56415--80.txt The agencies recognize that lenders and borrowers face challenging credit conditions due to the economic downturn , and are frequently dealing with diminished cash-flows and depreciating collateral values . CongressionalHearings/Dodd-Frank/CHRG-111hhrg53240/CHRG-111hhrg53240--105.txt Under Chairman Alan Greenspan , the Federal Reserve Board failed to stop the mortgage crisis in thee crucial ways : First , the Federal Reserve was the only agency that could have stopped the race to the bottom . CongressionalHearings/Dodd-Frank/CHRG-111hhrg53240/CHRG-111hhrg53240--105.txt During the housing bubble , three of the four Federal banking regulators -- the Federal Reserve , the OCC , and the OTS -- succumbed to pressure to loosen loan underwriting standards and safeguards for consumers . CongressionalHearings/Dodd-Frank/CHRG-111shrg56262/CHRG-111shrg56262--19.txt Mr. Irving , '' Good afternoon , Chairman Reed , Ranking Member Bunning , and Members of the Subcommittee . CongressionalHearings/Dodd-Frank/CHRG-111shrg56376/CHRG-111shrg56376--127.txt The Treasury Proposal would make these types of firms subject to the Bank Holding Company Act and supervision by the Federal Reserve Board . CongressionalHearings/Dodd-Frank/CHRG-111hhrg48874/CHRG-111hhrg48874--12.txt Additionally , the Federal Reserve Senior Loan Officer Opinion Survey on Banking Practices has shown that banks have been tightening lending standards over the past 18 months . CongressionalHearings/Dodd-Frank/CHRG-111shrg55739/CHRG-111shrg55739--144.txt To do so would put the Government in the position of validating private sector actors and would likely exacerbate over-reliance on ratings . CongressionalHearings/Dodd-Frank/CHRG-111shrg51303/CHRG-111shrg51303--12.txt Mr. Polakoff , '' Good morning , Chairman Dodd , Ranking Member Shelby , and Members of the Committee . CongressionalHearings/Dodd-Frank/CHRG-111hhrg53241/CHRG-111hhrg53241--28.txt I previously spent 26 years with the Federal Reserve System , 15 years as an Associate General Counsel at the Board in Washington . CongressionalHearings/Dodd-Frank/CHRG-111shrg52619/CHRG-111shrg52619--199.txt Although I did not join the Board until January 2009 , I support the action taken by Chairman Bernanke and the Board in 2007 to propose stronger HOEPA rules to address practices in the subprime mortgage market . CongressionalHearings/Dodd-Frank/CHRG-111shrg52966/CHRG-111shrg52966--75.txt Thrifts carry less than 5 percent of their assets at market value , with gains and losses recognized in earnings and regulatory capital . CongressionalHearings/Dodd-Frank/CHRG-111shrg52966/CHRG-111shrg52966--75.txt OTS is working with the other U.S. banking agencies to issue updated interagency guidance on funding liquidity risk management .