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Senate Banking Committee Nominations Hearing

Senate Committee on Banking, Housing, and Urban Affairs

Nomination Hearing

Tuesday, May 5, 2020

Key Topics & Takeaways

  • Implementation of the CARES Act: Wade said that the country is facing an unprecedented crisis and it is incredibly important to protect homeowners and renters experiencing hardship and provide as much clarity and certainty as possible. In response to questions from various Senators, Miller committed to following the law, communicating appropriately with Congress, and seeking expanded authority from Congress should it be necessary.
  • Inspector General Independence: Miller said independence is vital for the effective operation of any IG, and that IGs should be independent from the influence of both the executive and legislative branches. He committed to following the facts regardless of where they lead.

Witnesses

  • The Honorable Brian D. Miller to be Special Inspector General for Pandemic Recovery, U.S. Department of the Treasury
  • Dana T. Wade to be Assistant Secretary, U.S. Department of Housing and Urban Development

Opening Statements                   

Chairman Mike Crapo (R-Idaho)

In his opening statement, Crapo said that the COVID-19 pandemic has challenged the country’s sense of normalcy and every institution of daily life and has greatly impacted the physical and economic health of the country. He noted Congress and the administration have taken bold, dramatic steps to limit the depth of economic shock and provide conditions for a swift recovery, most notably passage of the CARES Act to put needed cash into the hands of American workers and families, provide relief to small businesses, and help stabilize markets and the economy. He noted that the Federal Reserve (Fed) and Department of the Treasury have announced a new and expanded set of lending programs to provide more than $2 trillion in loans, adding that these facilities are crucial components of the strategy to support the economy and enable a U-shaped recovery. Crapo said that Title IV of the Act includes robust oversight requirements to protect against waste, fraud and abuse, and the Special Inspector General (IG) will oversee the reporting and auditing requirements of the law, particularly the management of loans, guarantees and other investments made by the Secretary of the Treasury under any program established by the Act. He said Miller is highly qualified for this post, noting he has been outspoken on the need for IGs to be independent and have access to information. He also said that Wade is well-prepared to take the reins at the Federal Housing Administration (FHA), adding that he is confident she will provide the leadership needed during this critical time.

Ranking Member Sherrod Brown (D-Ohio)

In his opening statement, Brown criticized the decision to reopen the Senate for session, saying it puts workers and their families at risk, and that the agenda for the week does not include assistance for the unemployed, helping people stay in their homes, or supporting community health services. Brown said the IG will oversee CARES Act lending and investment programs designed to stabilize the economy and help workers, families and small businesses, adding that this lending will be critical to restarting the economy and beginning the recovery. He noted that the FHA Commissioner faces an affordable housing crisis made even worse by the pandemic, and the stability and the future of millions of families are on the line as Congress and the administration respond to this crisis. He added that FHA will need to “step up” to meet the needs of more households and ensure the mortgage market continues to function, and FHA will determine whether families can stay in their homes or will face a foreclosure crisis on top of this public health crisis. Brown said the American people need a strong watchdog to make sure the taxpayer money appropriated under the CARES Act goes to support the workers, families and businesses that need it, referencing the critiques that large corporations and franchises received loans while neighborhood cafes and barber shops waited.

Testimony

The Honorable Brian D. Miller to be Special Inspector General for Pandemic Recovery, U.S. Department of the Treasury

In his testimony, Miller spoke about his 30-year career in public service, including 15 years at the Department of Justice and 10 years as the Inspector General of the General Services Administration in both Republican and Democratic administrations. He also noted his time as an independent corporate monitor and practicing law in the areas of ethics and compliance, government contracts and internal investigations. Miller said that if confirmed, he will conduct every audit and investigation with fairness and impartiality and will be vigilant in protecting the integrity and independence of the Office of Special Inspector General. He pledged to use his authority and resources to uncover fraud, waste and abuse and to seek truth in all matters.

Dana T. Wade to be Assistant Secretary, U.S. Department of Housing and Urban Development

In her testimony, Wade said that if confirmed, she would be committed to doing everything she can to help the country emerge from the COVID-19 pandemic healthier, stronger and with a more prosperous economy, noting that HUD and FHA play critical roles in the nation’s safety net. She pointed to her experience in public service during the 2008 financial crisis, saying she learned during that time the importance of assuring that assistance quickly reaches those in need and maximizing the effectiveness of federal funds. She continued that if confirmed, her priorities would be to protect FHA homeowners, ensure the FHA has the necessary staffing and other resources to support the housing market, and vigilantly monitor risk to taxpayers of losses stemming from COVID-19 as well as protect FHA’s capital reserve to the maximum extent possible.

Question & Answer

Implementation of the CARES Act

Much of the questioning centered on how both nominees will implement various provisions of the CARES Act and other pandemic recovery efforts.  Crapo noted that FHA will be on the frontlines of helping families, providing much-needed liquidity in the housing finance system. He added that FHA will play an important role in implementing forbearance relief for homeowners, as well as restrictions on foreclosures and evictions. He asked Wade if she commits to working with the committee to implement such provisions and ensure that the options available when exiting forbearance are made clear for both consumers and servicers of FHA mortgages. Wade said she would, adding that the country is facing an unprecedented crisis and it is incredibly important to protect homeowners and renters experiencing hardship and provide as much clarity and certainty as possible.

Crapo asked about the role of FHA in the healthcare economy, specifically referencing that many hospitals, healthcare facilities and senior care facilities are financed in part through FHA programs. Wade agreed that this is an important part of FHA’s portfolio, and no healthcare facility that FHA serves should be concerned with anything other than serving COVID-19 patients and protecting the health and safety if its employees, adding that FHA should provide maximum flexibility in its healthcare portfolio.

Sen. Bob Menendez (D-N.J.) said that when the protections under the CARES Act run out, the country could face a foreclosure crisis even greater than that of the great recession.  He asked if Wade would commit to ensuring that FHA plays a strong counter-cyclical role in the mortgage market to help finance homes for American families. Wade replied that she believes this is integral to FHA’s mission and that it is important for FHA to “stay open for business” and promote market stability during this time.

Brown asked if Miller agreed that the IG has a responsibility to examine how funds are distributed, whether by the Treasury or the Fed. Miller said he would be responsible for oversight of programs administered by the Secretary of the Treasury which he will do faithfully, fairly, impartially and independently.

Asked by Sen. Pat Toomey (R-Pa.) about how the IG will work with the Congressional Oversight Commission, Miller said he would like to work cooperatively with the Commission while delineating responsibilities so as not to duplicate actions, adding that it will be vital to share information.

In response to questions from various Senators, Miller committed to following the law, communicating appropriately with Congress, and seeking expanded authority from Congress should it be necessary.

Inspector General Independence

Multiple Senators asked Miller to discuss the importance of the independence of the Inspector General and how he would push back on any attempted to infringe on the independence of the office. Miller pointed to his experience serving as the Inspector General of the General Services Administrations during which he was met with criticism and resistance for his investigations, saying this did not deter his work.

Miller said independence is vital for the effective operation of any IG, and that IGs should be independent from the influence of both the executive and legislative branches. He committed to following the facts regardless of where they lead.

For more information on this hearing, please click here.