6.17.20
On June 17, the House Committee on Financial Services held a hearing titled “Monetary Policy and the State of the Economy” with Federal Reserve Chairman Jerome Powell as the sole witness. During the hearing Representative Barry Loudermilk (R-GA) followed up on letters he wrote Chairman Powell on April 1 and April 6 about expanding TALF to include both non-agency RMBS and consumer installment loans as eligible collateral assets. Chairman Powell responded “they have been willing to expand things as appropriate” stating non-agency RMBS were under consideration, but noted consumer installment loans were different since they don’t have history in the ABS market, but are also something they’re considering. Representatives Bryan Steil (R-WI) and Roger Williams (R-TX) also asked Chairman Powell about a recent article that appeared in The Atlantic magazine that compared CLOs to CDOs claiming a collapse of the financial system was looming. In response Chairman Powell stated: “I don’t think that is an appropriate comparison, this is not the same as mortgage backed securities in that situation ten to twelve years ago.” The House hearing came one day after Chairman Powell testified before the Senate Banking Committee at a hearing titled “The Semiannual Monetary Policy Report to the Congress.” The hearing centered on management of the Federal Reserve’s lending facilities and the economic health of minority communities.