WASHINGTON — Securities and Exchange nominee Paul Atkins, a Wall Street and SEC veteran, fielded questions about his role in and views on deregulating the financial system ahead of the 2008 financial crisis, as he's
Atkins served as a commissioner at the SEC in the run-up to the 2008 financial crisis and voted several times to deregulate investment banks. He has also worked in and around Wall Street since leaving the agency.
Several Democratic lawmakers, including ranking member Sen. Elizabeth Warren of Massachusetts and Sen. Rafael Warnock of Georgia, pointed to these moves and his comments after the crash about overregulation being one of the reasons for the problems that led up to the crisis.
"Even after taxpayers had to spend $700 billion to bail out giant banks, Mr. Atkins denied that the bank should have been regulated more closely and that we should have kept a clearer eye on the mortgage market that blew up the economy," Warren told reporters before the confirmation hearing. "The SEC chairing job is about judgment, and Mr. Atkins has demonstrated that he does not have the judgment to keep Wall Street from blowing up our economy again."
While relitigating the 2008 financial crisis isn't the job of the SEC chairman, his comments give clues as to how he would operate the agency, and what issues he believes that financial regulators should prioritize.
"What troubles me is that some of the key factors are still unaddressed," he said. "That's Fannie Mae, Freddie Mac's activities in the marketplace, and how that could potentially create problems in the future."
Atkins also said, in response to questions from Sen. Raphael Warnock, D-Ga., that not deregulation, but "misregulation" caused the crisis.
"I think it was misregulation," he said. "Wasted resources and not focused on the real problems."
"The distortions that were created through the regulatory scheme at the time helped distract the examiners," he later clarified.
Atkins promised to tailor regulations and to provide
"The current regulatory environment for our financial system inhibits investment and too often punishes success," Atkins said in his written opening remarks. "Unclear, overly politicized, complicated, and burdensome regulations are stifling capital formation, while American investors are flooded with disclosures that do the opposite of helping them understand the true risks of an investment."
The Senate Banking Committee also considered the nominations of Jonathan Gould, a bank regulatory lawyer with a long career in Washington, to lead the Office of the Comptroller of the Currency and Luke Pettit, a staffer of Sen. Bill Hagerty, R-Ten., for the lead bank regulatory role at Treasury.
Questions for Gould largely centered on what he would do for "debanking." Republicans have picked up the issue under President Donald Trump as his administration champions cryptocurrency, and banks have so far been supportive of changes that lawmakers want to make at the agencies.
Those changes have, however, mostly centered on lowering compliance for banks. Gould went a step further and argued that both regulators and banks shouldn't discriminate against consumers for their political beliefs — another complaint of the Trump administration — putting the onus to make these changes on banks as well as regulators.
Previously, Trump-appointed regulators at the OCC have tried to pass
"I think it is unacceptable for banks or regulators to discriminate [against] customers on the basis of the customer's politics or religion, or the mere fact that they are engaged in a lawful activity that is for whatever reason, politically disfavored," Gould said.
All the nominees are expected to be confirmed. Republicans need just 50% of votes in the Senate to confirm Trump's picks.
