Tim Scott Leads Senate Banking Committee Hearing On 'The Affordability Agenda'

[0:00] Hearing to order, let me first thank the witnesses for taking the time and making the investment [0:04] of your talent for this committee to appreciate the issues that are challenging so many Americans [0:10] around the country. [0:11] So I really appreciate you guys being here. [0:13] Our committee seeks to answer a simple question. [0:17] How do we make life more affordable for families in South Carolina and frankly around the country? [0:24] That is a question I hear all the time at home. [0:28] How do we make this economy work for families who are already working hard, but too often [0:34] there's just too much month at the end of the money? [0:39] Housing is too expensive. [0:40] Food is too expensive. [0:42] Borrowing is too expensive. [0:44] Everyday life is simply too expensive. [0:49] A family in Wahala, South Carolina trying to buy their first home, a small business owner [0:53] in Greenville trying to expand, or a senior citizen in Rock Hill, South Carolina living [1:00] on a fixed income should not have to wonder whether Washington understands what it means [1:06] to choose, I mean this sincerely, to choose between prescriptions or groceries. [1:15] Affordability is not created by government programs. [1:18] More red tape or more spending we cannot afford. [1:22] Affordability comes from promoting competition, innovation, and opportunity. [1:27] That is why Senate Republicans have been focused on results that will bring relief to everyday [1:32] Americans. [1:33] We are approaching the one-year anniversary of the Working Families Tax Cut bill, a bill [1:38] that has put more money in the pockets of Americans who desperately need it. [1:44] Because of this bill, 97% of Americans received a tax cut this year, 97%. [1:54] And the people who benefit the most are people earning less than $200,000 a year. [2:00] Hardworking American families will take home more, nearly $300 a month more because of [2:07] the Working Families Tax Cut bill. [2:09] Let's not forget, every single Democrat in the Senate voted against cutting taxes, which [2:14] would have led to a $5 trillion, $5 trillion tax increase. [2:21] This committee has already advanced efforts to improve housing opportunity, create clear [2:27] rules for digital assets, strengthen our markets, and make the financial system work better for [2:34] everyday Americans. [2:35] Our 21st Century Road to Housing Act, which just passed the Senate by historic margins, I [2:41] think it was 85 to 4 yesterday. [2:45] Almost nothing happens in the Senate. [2:48] Nothing happens in the Senate. [2:50] 85 to 4. [2:51] We cut red tape. [2:53] We are unlocking housing supply and preserving local control. [2:58] I look forward to President Trump signing that legislation into law. [3:02] The Genius Act signed into law last year established a first-of-its-kind regulatory framework for payment [3:07] stablecoins, fueling financial innovation in America and creating economic opportunity. [3:13] The next step is solidifying American leadership in digital assets, in completing market structure [3:20] legislation. [3:21] And I'm proud of this committee's work to advance the Clarity Act on a bipartisan fashion. [3:27] Beyond legislation, we also have pushed for better implementation of my Credit Score Competition [3:33] Act. [3:34] So millions of Americans who are today credit invisible will have an opportunity to earn the [3:41] kind of credit scores and interest rates that they deserve by populating all of their information [3:49] on the credit scoring agencies. [3:51] And we have supported thoughtful regulatory right-sizing that helps protect consumers without driving [3:57] up the cost of credit. [4:00] Unfortunately, too many in Washington still believe the answer to every problem is more government. [4:07] We saw this during the Biden administration. [4:10] Reckless spending and heavy-handed regulation made life more expensive and made it harder for [4:17] businesses to invest, lenders to serve their communities, and builders to build. [4:22] We should be clear, regulations, they have a cost. [4:26] When Washington makes it harder for a bank to lend, a business to invest, a builder to build, [4:32] and an entrepreneur to grow, those costs do not disappear. [4:36] They show up in higher prices, fewer choices, and fewer opportunities for American families. [4:42] That is why cutting red tape is also an affordability issue. [4:48] These should protect consumers, not be weaponized for a political agenda. [4:53] The Biden administration should never have used the CFPB to target disfavored financial sectors, [4:59] restrict access to credit, or punish responsible lenders. [5:04] That made it harder for families and small businesses to access credit while making financial [5:10] products more expensive. [5:12] Senate Republicans are working to bring these costs down. [5:16] At the same time, the Biden administration was working to raise those prices. [5:22] Families in South Carolina and across the country are still living with the consequences [5:27] of the Biden-era policies in their monthly bills, their mortgage payments, and their household [5:33] budgets. [5:34] Families do not need more slogans. [5:36] They need lower costs, better opportunities, and a government that gets out of the way as [5:42] Americans try to build a better life. [5:45] Today, I look forward to hearing from our witnesses about practical steps we can take to lower costs, [5:52] expand opportunity, improve affordability, and reduce unnecessary regulatory burdens without [5:58] growing government. [6:01] Senator Warren, you are now recognized. [6:03] Thank you, Mr. Chairman. [6:04] I want to thank you for holding today's hearing on affordability. [6:09] It's only Tuesday and our committee has already had a big week. [6:11] We have to. [6:12] Yesterday, the Senate passed our 21st Century Road to Housing Act and now the House is on [6:17] its way to passing it too. [6:20] This is the biggest housing bill in more than 30 years. [6:23] It will help build more housing, bring down costs, and for the first time ever, stop private [6:29] equity from snapping up homes that families are trying to buy. [6:34] And your leadership helped make that happen. [6:37] Our housing bill is an affordability accomplishment that everyone on this committee can be proud [6:43] of. [6:44] But it is not nearly enough to offset the economic policies of President Trump and the devastating [6:51] impact that they have had on American families. [6:54] So let's set a baseline. [6:56] When Trump took office, inflation was down to 3% and headed down. [7:02] The first thing he did was slap tariffs on nearly every item from nearly every country. [7:08] These tariffs will cost the average American household more than $2,500 this year. [7:16] Now the Supreme Court struck down these tariffs as illegal and the administration has not lifted [7:23] a finger to give consumers a refund on the very high prices that they pay. [7:30] Then came Trump's illegal war with Iran, which caused energy prices to skyrocket. [7:36] The impact of the war continues to jack up costs for every single sector of our economy. [7:44] Republicans have spent $43 billion more on gasoline alone than they would have if Trump had never [7:54] started this war. [7:56] Trump spent billions to cut renewable energy projects, you know, the kind of energy that [8:01] would actually lower utility costs. [8:05] And Trump and Republicans have sent health insurance premiums soaring, with next year's premium hikes [8:12] already on track to rival last year's record-breaking increases. [8:19] In between these disastrous policies, it has been nonstop Trumpian extravaganza of corruption [8:29] and incompetence. [8:31] Anti-consumer mergers that will drive up costs for everything from cable TV to credit cards [8:37] get rubber stamped under the shadiest possible circumstances. [8:43] The CFPB, which has returned more than $21 billion directly to families that have been scammed, [8:51] has been hollowed out and sidelined. [8:54] Doge fired the USDA team responsible for preventing screw worm, and now an outbreak threatens to [9:01] bankrupt ranchers and send already high beef prices through the roof. [9:08] And one white-collar criminal after another gets DOJ dismissal or a Trump pardon, sending [9:17] a clear message that it is okay for wealthy insiders to rip off families and consumers. [9:26] And what's the result? [9:28] Inflation now sits at its highest level in three years, 4.2 percent, nearly double what [9:34] it was last year. [9:36] Americans are paying more for groceries, for health care, for gas. [9:40] The Federal Reserve is forecasting higher inflation, higher interest rates, and slower growth. [9:45] And the American people can see plain as day that as the economy gets worse, Trump gets [9:52] more chaotic. [9:54] Trump focuses on building his golf course and his giant ceremonial arch, getting the right [10:02] marble for his taxpayer-funded gold-encrusted ballroom, with no thought to the rising costs [10:09] that are bearing down on Americans. [10:12] The same guy who ran for office saying he would tackle inflation on day one now calls affordability [10:20] a, quote, hoax and a, quote, made-up word. [10:26] He says, quote, I don't think about Americans' financial situation. [10:31] He says that he, quote, loves the inflation. [10:37] Trump doesn't care about hardworking Americans. [10:39] He cares about making himself richer by cutting crypto deals and making thousands of stock [10:45] transactions with companies whose value he can boost with deregulatory policies or giant [10:52] government contracts. [10:55] Trump's billionaire friends are along for the ride. [10:59] They're getting richer by the hour, while American families are stuck with the bill. [11:05] The world just got its first trillionaire, and the Trump family's wealth is up by at [11:09] least $2.3 billion since just last year. [11:16] And meanwhile, Americans' real wages since Trump was sworn into office 18 months ago have [11:23] fallen. [11:25] Mr. Chairman, I am glad that we are having this affordability hearing today. [11:29] It is a stark reminder of the president's failures. [11:34] Americans want Washington to make affordability our first priority. [11:38] And instead, all Donald Trump is offering are higher prices, more chaos, and unprecedented [11:45] corruption. [11:46] I look forward to our conversation today. [11:49] Thank you. [11:51] I now recognize our first witness, Mr. Cody Carbone, Chief Executive Officer at the Digital [11:56] Chamber. [11:57] Chairman Scott, Ranking Member Warren, members of the committee, thank you for the opportunity [12:06] to testify today. [12:07] I'm honored to be here this morning. [12:09] My name is Cody Carbone, Chief Executive Officer of the Digital Chamber, the world's largest [12:14] digital asset and blockchain trade association. [12:17] Our members span more than 250 companies, from the world's largest exchanges and banks to [12:22] startups, innovators, builders, and developers. [12:26] I'm here to talk about how digital assets can make life more affordable. [12:30] By calling attention to a hidden tax most families never see, but they feel. [12:34] The cost of moving money and the cost of moving assets. [12:38] It's simply too expensive and takes too long to move money and assets today. [12:43] Nearly one in four American households live paycheck to paycheck. [12:48] And the Federal Reserve reports more than a third couldn't cover a $400 emergency without [12:53] borrowing. [12:54] For those families, a credit card swipe fee or a three-day hold isn't just an inconvenience, [13:00] it's an overdraft, a late fee, or a payday loan. [13:04] Yet digital assets and blockchain are the first real chance in decades to help people move the [13:08] money they've earned more easily. [13:11] To make sending money as simple and efficient as sending an email. [13:15] Today, I will discuss how digital assets can help lower costs in three areas. [13:21] First, the cost of moving money across borders. [13:27] Americans send more money abroad than any nation on earth. [13:29] More than $100 billion last year. [13:32] It costs 6.5% to send. [13:35] More than double the international target. [13:38] And takes three to five days to arrive. [13:40] It costs more than $6 billion a year skimmed out of working families' pockets. [13:46] A worker sending $100 home to a foreign country sees only $93.50 arrive. [13:52] However, if they were using a dollar-backed stablecoin, that family keeps the full $100 and [13:58] receives it in seconds. [14:00] The same wall hits the freelance designer in South Carolina paid by a client in Europe [14:05] or a manufacturer in Ohio paying an overseas supplier, which is why business-to-business payments [14:10] are already the single largest use of stablecoins today. [14:14] The rails work and cheaper cross-border payments make American businesses more competitive. [14:20] Second, closer to home, more competition in everyday payments. [14:25] There's real cost embedded in how we pay today. [14:28] And Americans deserve more choice. [14:30] A regulated stablecoin is one more option. [14:34] Cheaper to process settling in seconds. [14:36] And it's a tool banks can offer too. [14:39] Under the Bipartisan Genius Act, banks themselves can issue these products. [14:43] This isn't about taking anything from the system we have. [14:46] It's letting a cheaper, compliant rail compete so a merchant can pass a discount to customers [14:51] at the register. [14:53] And third, the biggest purchase most families will ever make, a home. [14:58] Today, thousands of dollars vanish into the process of transferring a home. [15:02] Closing costs of up to 5%, often more than $10,000, much of it just to establish who owns [15:07] what and to move the money. [15:10] Tokenization attacks that directly. [15:12] It records ownership clearly, settles in seconds instead of weeks, and strips out the layers [15:17] of middlemen who each take a cut. [15:20] Independent analysts estimate that cut of tokenization can cut transaction costs by 35% to 65%. [15:29] This is big in housing, but the same approach reaches car titles, equities, treasuries, small [15:34] business invoices, and more. [15:36] And it opens the door the other way too. [15:39] Tokenization provides for fractional ownership, which lets a family own a piece of a wealth-building [15:44] asset for as little as a dollar instead of being locked out like they have for decades. [15:49] Tokenization is real, it's growing, and the savings are already proven in the institutions [15:53] using it today. [15:56] This committee deserves real credit. [15:58] The Genius Act is working. [16:00] And finishing the job through the Clarity Act is the best chance Congress has had to set [16:03] clear rules of the road. [16:06] Clarity is closer than it has ever been, and I'd urge the Senate to finish it this year. [16:10] Clear U.S.-based rules are what unlock tokenization for ordinary Americans, keeping this activity [16:16] onshore, and creating good-paying jobs. [16:19] Because in the end, the cost of moving money and moving assets is real, and it shows up in [16:24] every household budget. [16:26] The Digital Chamber is proud of our role in helping Americans shed that burden in working [16:31] with this committee. [16:32] Thank you for your time, Mr. Chairman and Ranking Member Warren, and I look forward to [16:35] your questions. [16:36] Thank you very much. [16:38] All right. [16:39] Next witness will be Mr. Kevin Brown, the President of the National Association of Realtors. [16:42] You are now recognized, and thank you all for your support of the housing bill as well. [16:46] Yes. [16:47] Thank you. [16:48] Thank you, Chairman Scott, Ranking Member Warren. [16:50] Members of the committee, thank you for inviting me to testify at today's hearing on America's [16:55] affordability agenda. [16:57] My name is Kevin Brown. [16:58] I'm the 2026 President of the National Association of Realtors, the largest trade association in the [17:03] country with nearly 1.5 million members. [17:06] I'm also a broker owner with Better Homes Realty, Rockridge, and Oakland, California. [17:12] Every day, Realtors work with families and individuals who have saved, worked hard, and [17:16] maintained good credit, yet still cannot find an affordable home. [17:21] The numbers are staggering. [17:23] Housing remains one of the largest drivers of economic growth in the country, making up [17:27] nearly a fifth of the U.S. economy. [17:30] But the supply of homes to purchase has collapsed. [17:34] The American population has grown nearly 30 percent since 1995, yet the existing housing [17:40] stock has actually dropped more than 25 percent from 1.58 million units in 1995 to 1.18 million [17:48] units today. [17:50] The median annual home price has skyrocketed to over $400,000, and the average age of the [17:55] first-time homebuyer is now 40 years old. [17:59] This is not sustainable. [18:01] Thankfully, under the leadership of this committee, meaningful changes are on the way. [18:06] The 21st Century Road to Housing Act is the most consequential housing legislation in decades. [18:12] The bill strengthens many existing programs and streamlines others while cutting red tape [18:16] and removing barriers to housing development. [18:20] In particular, the bill reforms federal housing programs such as the Home Investment Partnership [18:25] Program and the Community Development Block Grant Program to be more flexible and effective. [18:31] The legislation modernizes financing for rural manufactured and modular housing and updates [18:37] FHA multifamily loan limits to reflect today's market. [18:40] It also streamlines federal environmental review and increases coordination across agencies. [18:46] On the state and local side, it provides resources and incentives, not mandates, to help [18:51] communities build and preserve homes. [18:54] The Housing Supply Frameworks Act requires HUD to work with stakeholders to develop guidelines [19:00] and best practices for addressing zoning policies that block housing production. [19:06] The bill includes funding to develop pre-reviewed design libraries of ADUs, duplexes, townhouses, [19:13] that can help streamline permitting. [19:15] It also creates planning grants to support affordable housing strategies at every level of government [19:20] and a home renovation pilot to help families preserve the home that they already own. [19:26] The House and Senate now agree, or now agree, we look forward to this legislation being signed [19:32] into law, adding to other successful reforms from Congress, such as Opportunity Zones and low-income [19:39] housing tax credits. [19:41] We know the 21st Century Road to Housing Act will have the same meaningful impact, but [19:45] as we all know, there is more work to be done. [19:48] We know it will take time to build more homes, but we also need to ensure that communities [19:52] don't adopt short-sighted, quick-fix things to address affordability. [19:58] In my home state of California, we have seen policies that do more harm than good. [20:02] While solutions like rent control may be popular, the on-the-ground results only water down personal [20:08] property rights, discourage more development, and push mom-and-pop housing providers from [20:14] the market. [20:15] Property ownership works best when property rights are strong. [20:18] That's what allows consumers to build and protect equity, the foundation of long-term [20:23] wealth. [20:25] While rent control may be seen as a way to protect tenants, in practice it limits housing opportunities [20:30] and makes it more expensive. [20:32] This is why it's critical that the federal government take the lead in meaningful lasting solutions. [20:39] Seniors look forward to working with Congress on additional reforms and policies, such as [20:42] More Homes on the Market Act, a bipartisan bill that would double the capital gains exclusion [20:48] threshold on a primary residence for the first time in nearly 30 years, while adjusting the [20:54] caps to reflect future inflation. [20:57] Just like people who are locked into their homes at lower interest rates, seniors are often [21:02] locked in because of the home equity penalty. [21:06] This legislation expands existing housing stock and gives seniors the opportunity to tap equity [21:11] that they have counted on for retirement. [21:14] In turn, move-up buyers can then buy homes, thus freeing up houses for first-time homebuyers. [21:21] Additional policy solutions are included in my written testimony. [21:26] We know there is no silver bullet that will quickly fix the supply and affordability crisis, [21:31] but the solutions this committee has championed will help the housing market for decades to [21:35] come. [21:36] Thank you, Chairman Scott and Ranking Member Warren. [21:38] I look forward to your questions. [21:39] Thank you, sir. [21:40] Next, we'll hear from Dr. Morgan, President of the Century Foundation. [21:46] You are now recognized. [21:47] Chairman Scott and Ranking Member Warren, thank you for inviting me to testify before the committee [21:53] today. [21:54] As a public policy think tank dedicated to improving the lives of all Americans, the Century Foundation [21:59] has been acutely focused on how rising costs are affecting working families. [22:04] While President Trump is calling affordability a hoax or a fake word and confessing that he [22:09] does not think about Americans' financial situations, families are dealing every single day with the cost [22:15] of living crisis that Donald Trump promised he would fix. [22:18] From his first days in office, President Trump has gone back on his campaign promises, layering [22:23] one price hike on top of another. [22:26] Starting on so-called Liberation Day last April, the Trump administration set off a series of [22:30] tariffs that have cost American consumers an average of about $1,700, increasing prices [22:36] on a wide variety of must-have items from groceries, clothing, and school supplies to building materials [22:41] and electronics. [22:43] The Trump administration and Republicans in Congress then pushed through massive tax cuts for [22:48] the wealthiest Americans, paid for by increasing the cost of health care, higher education, [22:53] energy, and food for ordinary families. [22:56] While the wealthiest Americans got a boost, those tax cuts for the ultra-rich cost the lowest [23:00] income families about $1,200 a year. [23:03] In fact, any benefits the average families may have seen from Trump's tax plan were completely [23:08] wiped out by a war with Iran that is keeping gas prices at nearly $4 per gallon and has cost [23:14] families an estimated $100 billion to date. [23:18] On the Trump administration's watch, some of the biggest expenses for ordinary families [23:22] have become even less affordable. [23:24] New car prices hit record highs, health insurance premiums have spiked, home prices rose again [23:30] this last year, and rent and mortgage payments both remain alarmingly high. [23:34] And prices are only one side of the equation on affordability, wages are the other. [23:39] Since returning to office, the president has directly cut the wages for home health workers [23:43] and farm workers, wreaked havoc on the agencies responsible for ensuring that workers can exercise [23:49] their rights, and in 2025, ushered in the worst year of job growth since 2020. [23:54] The cumulative impact of these policies has been disastrous for working families. [23:59] Our research shows that half of Americans report skimping on health care services or taking [24:03] on debt to deal with their rising health care costs. [24:06] Half have had to tap into savings to meet their day-to-day expenses. [24:10] In one survey, one in three respondents reported that they or someone in their household has skipped [24:16] meals to save money in the past year. [24:20] Americans are increasingly forced to use debt to make ends meet, but high-cost loans are pushing [24:25] families further over the edge. [24:27] Outstanding credit card balances stand at around $1.25 trillion, with delinquency rates of more [24:33] than 13 percent, the highest level since the Great Recession. [24:37] Student loan delinquencies have also shot up under the Trump administration from nearly [24:40] zero to about 25 percent. [24:43] Auto debt has exploded. [24:45] Bankruptcy filings increased almost 12 percent between 2025 and 2026. [24:50] Home foreclosure filings are up 26 percent from the last year and are the highest they've [24:54] been since 2020. [24:57] This mountain of debt adds a new dimension to the affordability crisis. [25:01] Driving down the prices of individual goods and services won't fully alleviate the pain [25:05] that families are feeling or the drag it places on the economy. [25:09] Lower gas prices next week don't mean all that much when you're still paying off your price [25:14] at the pump from the last week or last month's groceries at a 24 percent interest rate. [25:20] Not everyone is losing in the Trump economy, however. [25:23] The Trump administration has engaged in a relentless, corrupt agenda of self-enrichment, deregulation, [25:28] corporate pardons, and sweetheart deals for the wealthy and the well-connected. [25:33] Some of the beneficiaries are represented here in this room, like the banks that continue [25:37] to derive excess profits from overdraft and credit card late fees that cost consumers [25:42] $15 billion a year. [25:45] This committee has the power to advance legislation that would help save Americans billions of dollars. [25:50] I applaud you all for starting with housing, an area of critical need. [25:54] And I saw this morning that Senator Warren and Senator Moreno are working to save Social [25:58] Security as well. [26:00] But with 110 million Americans unable to pay off their credit card balances each month, [26:05] and banks tucking massive profits into historically high interest rates, there is much more to be done. [26:11] The affordability crisis is not a hoax. [26:13] It's a back-breaking reality for the vast majority of Americans. [26:17] This committee must take action to address it, and I look forward to your questions. [26:20] Thank you. [26:24] Thank you, ma'am. [26:25] We'll now hear from Ms. Lindsey Johnson, the Community Bankers Association. [26:30] Thank you. [26:31] Chairman Scott, Ranking Member Warren, and members of the committee, thank you for the opportunity [26:35] to testify. [26:36] My name is Lindsey Johnson. [26:37] I'm President and CEO of Consumer Bankers Association, the nation's only trade association [26:42] exclusively focused on retail lending. [26:45] For as long as there's been an American economy, banks have helped families and small businesses [26:48] build within it. [26:50] That work often begins with something simple, safeguarding a paycheck, and it grows from [26:55] there. [26:56] Banks take deposits and put them to work in communities, helping consumers establish credit, finance [27:01] and education, buy a car, purchase a home, or start or expand a small business. [27:06] For millions and millions of Americans, a credit card or a small loan can take a family from [27:11] credit invisibility to financial opportunity. [27:15] The same is true for small businesses. [27:17] Many begin with a founder's personal credit card, grow into a small business loan, mature [27:21] into an enterprise that takes payments, manages cash flow, hires employees, and serves their [27:26] communities. [27:27] At every stage, banks are alongside them. [27:30] But the true measure of a bank is not just what it does in good times. [27:34] It's what it provides when life doesn't go according to plan. [27:37] When a paycheck and a bill don't line up, when a car breaks down, or when hours are cut, [27:41] bank products can be the bridge between a difficult month and a genuine crisis. [27:45] A credit card, an overdraft service, a home equity line of credit can help a family absorb [27:51] a shock, stay current, and keep moving forward. [27:55] Banks also provide another layer of support for consumers that they may not see. [27:59] With fraud prevention, payment security, and technology that makes modern commerce possible, banks do well when [28:04] their consumers, small businesses, and their communities do well. [28:07] Today's economy and consumers are remarkably resilient. [28:11] But affordability is a real concern for many families, as essentials like housing, healthcare, food, and transportation, [28:18] what we refer to in our written testimony as a four horsemen of affordability continue to pressure household budgets. [28:25] As costs have risen, families, particularly those at the bottom of the K-shaped economy, feel it more acutely. [28:31] Consider the median household making around $68,000 after taxes, or roughly $5,700 a month. [28:37] Essentials like housing, vehicles, healthcare comprise around two-thirds of their budget, and if you add childcare in there, [28:43] it consumes around 75% of the budget before utilities, gasoline, retirement savings, and other [28:48] reoccurring costs. [28:49] By year's end, this household has a net savings of around $540, or roughly $45 a month. [28:56] It's an incredibly thin margin, where a single unexpected expense can upend a family budget. [29:01] And 75% of Americans experience at least one expense shock a year. [29:06] On average, that expense shock is around $5,000. [29:09] For consumers like this, low-cost financial products from Main Street banks can help manage [29:13] and smooth out those unexpected expenses. [29:16] Conversely, credit cards and other products and services that serve as shock absorbers comprise [29:21] a very small amount of the consumer's budget, as credit card interest accounted for roughly [29:26] 1% on average of the household budget in 2024, for example. [29:30] And overdraft and other fees are even less. [29:33] Congress, this committee, and the administration deserve credit for advancing solutions focused [29:38] on core sources of affordability challenges, including pending bank capital rules that are going [29:43] to enhance banks' abilities to lend, bipartisan work on housing expansion and supply, and support [29:49] for small business lending. [29:51] CBA also appreciates the focus on fraud and scams, a fast-growing threat costing Americans [29:56] billions every single year. [29:58] Combating it requires stronger coordination, accountability, law enforcement engagement, and more engagement [30:05] across technology, telecom, and non-bank marketplaces. [30:08] As policymakers consider additional solutions, it is so critical to preserve the financial [30:14] tools that help families manage those unexpected expenses. [30:17] Quick fixes, like credit card rate caps, may seem appealing, but they simply reduce access [30:22] to credit, and they make it harder for consumers who need it most to access that credit and instead [30:28] pushes them to less regulated alternatives. [30:30] A better approach, detailed in my written testimony, is to address affordability challenges at their [30:36] source while maintaining responsible access to credit. [30:40] Banks cannot solve structural affordability and income challenges alone, but we can and do [30:46] help families manage through it, ensuring access to essential credit and liquidity in a competitive [30:51] and sustainable way. [30:53] The last six years have presented some of the most unprecedented challenges to the economy and [30:57] consumers in modern history. [30:59] Yet banks' role to support consumers and small businesses during this time led to make greater [31:03] resiliency for families, for businesses, for communities, and the broader economy, as banks [31:09] were the driving force in the fastest post-pandemic recovery in modern history. [31:15] Banks will continue to serve as foundational partners in American life and will support stability [31:20] and help families achieve their own American dream. [31:23] Thank you again, and I welcome your questions. [31:24] Thank you very much. [31:26] Each member of the committee will have an opportunity to ask questions of any of the witnesses for [31:32] up to five minutes, and then we'll move on. [31:37] I'll start. [31:38] One of the things I said during my opening comments was that because of the working families [31:44] tax cut bill, 97 percent of Americans saw their taxes go down, and the focus of those tax [31:53] decreases were on people making less than $200,000 a year. [31:59] 100 percent of Democrats voted against the tax cuts for 97 percent of Americans. [32:06] Five trillion dollars is just a mind-numbing amount. [32:13] But $250 a month is something I can understand. [32:19] Giving Americans 250 additional dollars because of our working families tax cut bill that showed [32:27] up in tax returns, an increase on average of 11 percent is just another way the Republican [32:33] majority is working on behalf of the American people, making 2026 the year of affordability, [32:40] working in the right direction. [32:42] I'd also add to that comparisons matter. [32:46] The contrast between the Biden administration years where the average family was losing more [32:52] than $1,000 of purchasing power a month, and inflation got as high as 9 percent. [33:00] And oh, by the way, don't forget, gas prices, June of 2022, $4.88 a gallon on average. [33:14] On top of all of that, one of the most oppressive regulatory environments in modern history brought [33:21] to us by the Biden administration. [33:25] Digging out of that hole has taken time without any question. [33:30] And when I think about the regulatory burden put on top of the average person in this country, [33:36] I think about the regulatory options like Basel III, an initiative coming to the table that [33:42] fortunately and thankfully we were able to dodge that really devastating bullet to the American people. [33:50] Now, most people may not be as familiar, Lindsay Johnson, as you are with the Basel III provision. [33:58] Let's talk about that for a few minutes because my understanding is the more money you park on [34:05] the sidelines, the fewer dollars you have for first-time home buyers, starting a small business, [34:14] purchasing a car, and yet on top of that one regulatory option, another one through the CFPB, [34:20] spying on businesses, looking for ways to bring more onerous pain into the lives of just working [34:30] class small business folks trying to make their ends meet. That regulatory pressure on top of the [34:39] economic uncertainty created an instability that I'm not sure that we fully appreciate or have absorbed [34:47] completely. Thoughts, Ms. Johnson? [34:50] Well, I'll start with the conversation around Basel and just capital proposals and regulatory burden [34:56] generally. You know, your comment is right. We have to get that balance between safety and soundness [35:03] and allowing a bank to be a bank and wanting a bank to compete with all the other non-banks in the [35:08] atmosphere. More competition means more safe product options. And what we saw before under the Basel III [35:14] proposal that was released in 2023 was something that outstripped even international standard. It [35:19] would have made U.S. banks far less competitive, push banks outside of certain lending segments, [35:26] and mortgage banks are already a much smaller portion of that market than they were before. [35:32] The more we can get that competition in the marketplace, the lower cost will actually lower [35:38] because competition, that's what it's there for. So that's one example. And then I would say on the [35:43] CFPB, look, we need a CFPB that's credible and durable and stable. We need a CFPB that does a true [35:51] cost-benefit analysis, a rigorous cost-benefit analysis, to understand how the rules that it's [35:56] writing are actually going to impact consumers. And oftentimes, whether it was credit card late fee [36:01] or overdraft, they simply overlooked it. Consumers were going to lose access to these products [36:07] by their own admission on credit card late fees. 74 percent of people were going to see their costs go up, [36:13] and that small portion of people who are frequent late payers would see some benefits, but they [36:19] didn't take into account that their credit score was going to be hurt long-term driving their costs up. [36:24] We've got to do a better job of having an honest conversation that's apolitical at these agencies [36:29] so that we can really drive cost savings to consumers. With my time that I have left with just [36:34] only about 30 seconds because I'm the chairman, so I can't tell time. Mr. Brown, you said that you have [36:41] more solutions in your written comments. In about 15 seconds, could you provide us with one solution [36:47] you think would make housing more affordable that you haven't heard so far? Sure. More Homes on the [36:52] Market Act, which is also a bipartisan bill before Congress, provides for doubling of capital gains, [37:00] the capital gains exemption from $250,000 and $500,000 for a married couple to $500,000 for a single [37:07] person, $1 million for a married couple. That would free up. There are people on the sidelines right [37:12] now just waiting because they either don't want to pay the tax or can't afford to pay the tax, [37:17] and so that would free up inventory. You don't have to put any shovels in the ground. There would be [37:21] instant inventory into the marketplace where buyers would come in, buy that property, which would free up [37:28] some housing also for first-time home buyers. Thank you. [37:31] And thank you for your work on that, by the way. I appreciate that. Thank you, Mr. Chairman. You [37:37] know, I'm really glad that we are holding a hearing about President Trump's affordability agenda, and I [37:43] am glad that my Republican colleagues don't seem to agree with President Trump's claim last week that, [37:49] quote, affordability is a fake word made up by Democrats. In fact, I want to ask our witnesses about [37:58] that. So, raise your hand if you agree with the President that affordability is a hoax made up by [38:05] Democrats. I'm giving you time here. Okay. No hands up, and I assume that means none of you, Democrats or [38:16] Republicans, agree with President Trump that the affordability crisis facing American families is a [38:23] hoax, and that seems right to me. You know, President Trump's agenda has driven up costs [38:29] so that families are putting more of everything from groceries to gas on their credit cards. [38:36] Trump's own top economic advisor, Kevin Hassett, recently bragged that, quote, [38:42] credit card spending is through the roof. He's right. Over 100 million Americans have credit card debt now, [38:50] many of them putting groceries and gas on their credit cards just to be able to make it to the end of the [38:54] month. And delinquencies are at the highest level since the crash of 2008. So, let's talk about [39:02] affordability. In January, President Trump promised to cap credit card interest rates. He politely asked [39:10] the biggest banks to put in place a one-year 10 percent cap by January 20th. Now, Ms. Johnson, [39:20] your organization represents some of the biggest banks in the country. We are more than five months [39:26] past Trump's January 20th deadline. Which banks have implemented the one-year 10 percent cap on credit [39:35] card interest rates that President Trump promised to deliver? So, thank you for the question. There's a [39:44] couple of things I'd love to say. One, banks offered zero percent APRs today. I'm sorry. I had a specific [39:51] question. Donald Trump told the banks that they should lower their credit card interest rates to 10 [39:58] percent by January 20th. He said that's what he would deliver for the American people, promised it to [40:04] everyone in America. And I just want which banks have actually lowered their credit card interest rates [40:10] to 10 percent. Can you give me their names? There are definitely options that are low-cost APR options. [40:15] I'm sorry. Which banks have lowered their credit card interest rate to 10 percent? Are there any [40:22] that are at 10 percent? Can you name one? I can tell you that there are options today. Can you name [40:28] one bank that has lowered its credit card interest rate? As President Trump politely asked. And no bank [40:35] wants to cut off credit to people with below a interest rate. Has there been one? Including [40:41] average Tuesday. Has there been one? One? There are options in the marketplace for sure. So not a [40:48] single one has followed through on what President Trump told them to do. So President Trump and the [40:54] big banks, they don't provide the 10 percent cap on credit cards. Ms. Johnson, how much more have [41:00] Americans paid in interest on credit cards than they would have paid if the cap the president promised [41:09] had taken effect? What's the number? So again, I want to go back to the rate card. What's the number? [41:15] The rate. So we have not done that. I'll bet you haven't done that calculation. But here's the thing [41:20] I have. It's 57 billion dollars in credit card interest rate above 10 percent that of Americans have [41:30] paid since January 20th. By the way, if you just do the math, that's 368 million dollars a day. Now, President [41:39] Trump promised he was going to make banks lower interest credit card interest rates for families [41:44] by January 20th. And so far, families have been paying 368 million a day for Donald Trump's broken [41:54] promise. Now, we know that families have less money to spend and are falling behind on their bills [41:59] thanks to Donald Trump's economic policies. Dr. Morgan, if you can tell me very briefly, how are people [42:06] coping with these tighter finances? I mean, families are really struggling. As I said earlier, you know, [42:13] one in three are skipping meals, they're skipping medications that are prescribed by their doctors, [42:18] they're skimping on health care services, and they're turning to debt. I think it's important to [42:22] know that's a both and, right? We're seeing people both cut back on the things that they need to live [42:27] their lives and also put their expenses onto high cost debt, both credit cards, buy now, pay later, [42:34] paycheck advance loans. Thank you. You know, President Trump may love inflation, but it's killing [42:42] American families. Congress needs to work together to fix the president's failed economic agenda and [42:49] to make life more affordable for all Americans. Thank you, Mr. Chairman. Thank you, Mr. Chairman. Look, [42:58] I really appreciate the fact that the chairman and the ranking member have come together to have [43:04] this discussion on where the costs are right now for American consumers. And I think it's really [43:09] important that we talk about all of the impacts. I noted that there's always a desire to have your cake [43:17] and eat it too. Sometimes that's not possible, particularly when we talk about how we go about [43:22] financing activities in our daily lives. I'm just curious, Ms. Johnson, you represent a lot of banks [43:31] that issue a lot of credit. How many people today have credit cards in America? A couple hundred, [43:39] actually almost 282 million people have credit cards. I will say, yeah. 282 million people have credit [43:47] cards today. Can you imagine not having credit and being able to survive in today's digital economy? [43:55] I'm just curious, can you, I mean, we use them to get on an aircraft, but we also use them to literally [44:03] do digital shopping, anything over the internet at all. Telephones we pay for with a credit card in most [44:10] cases. Just thinking back about this thing here, one of the greatest threats to a lot of people being able [44:18] to survive on a day-to-day basis is if they couldn't get credit. What would happen? I'm just curious. [44:23] I think the president really wanted to find a way to try to suggest that he wanted the marketing side [44:30] of things to be able to be incentivizing and to offer people low interest rates. But a lot of credit card [44:37] companies offer 0% interest rates for short periods of time. Can you talk a little bit about what would [44:43] happen if, and I presume you've done the work on it because you represent the banks that, that really issue [44:50] these cards. What would happen? What would be the impact if government were to step in and artificially say [44:59] you have to have an interest rate of 10% less or less on credit cards? What, what would happen to the [45:05] number of people that would have availability of credit cards today? So it's such an important question and it's [45:10] the right question because ultimately it's the best way to make sure that someone only with an 800 [45:15] credit score has access to credit. You said what? Only people with an 800 credit score would have access [45:20] to credit. So how many people have or how many people don't have an 800 credit score today out of those [45:30] hundreds of millions of people that have credit cards? It would restrict credit for around 75 to 80 percent [45:34] in the current market. 75 to 80 percent that would be around 150 million. 75 to 80 percent of the current [45:43] credit card holders? Yes. And how would that, how would that happen? Would they simply lose them on day [45:48] one or what would happen? It would be fairly quick. It would be fairly immediate because ultimately risk-based [45:54] pricing allows uh issuers and there's 4 000 plus issuers that compete for consumers business every single [46:02] day to go out there and make sure that consumers have access to this necessary liquidity and source [46:07] of credit in a very sustainable way. You can't do that for free and part of this is making sure that we [46:14] have plenty of options and you mentioned the zero percent uh balance transfers. There were 60 billion [46:20] in balance transfers last year in 2024 alone. We are focused on making sure that consumers understand [46:26] those different options but to simply take away a source of of credit for consumers seems incredibly [46:33] punitive. You know in in the 1980s uh we had a tough time on the ag markets in South Dakota. We had we had [46:42] usury rates in place and because we had usury rates in place there were banks that simply wouldn't loan to [46:49] farmers anymore because well it was been a tough time uh a lot of the guys were struggling and yet in order [46:56] to put seed in the ground in the spring of that year. Bill Jankler was governor at the time and uh [47:03] he looked at it and he says look I don't care if it does cost a little more interest rates we've got [47:06] to get these guys some credit so they can actually put put their crop in the ground. It's the reason [47:11] why South Dakota at that time eliminated their usury rate. In doing so banks charged more than what the [47:17] the the traditional usury rate was but we had farmers that survived because they could actually borrow the [47:23] money. My concern with this whole discussion is that you say we've got over 4 000 different banks [47:29] that issue credit cards today. I'm just wondering it seems to me that these folks that have got these [47:33] great ideas about in about issuing 10 credit rates out of the 4 000. I'm sure one or two of them could do [47:41] that today but I'm just curious why we don't have some new startups by these folks that have got these [47:46] great ideas and they could issue 10. In fact they could go to 8 percent and they could get a lot of [47:51] people coming in. I wonder how long they would actually be able to continue to offer that rate [47:56] based just upon the individuals that might not be able to qualify for a regular card but would love [48:04] to have that interest rate. Is there a reason why we don't have a lot of people offering that 10 percent [48:09] interest rate today? It's just simply not sustainable. The worst thing we can do for a consumer is to [48:14] extend them a product that they cannot afford to pay back. One of the things and I do want to just [48:20] push back on a couple of the different comments about the overall balances if I've got a second [48:25] because. About 10 seconds. Could you loan me 30 seconds? I loaned myself 30 so thank you. [48:32] One of the most important things to understand is that through the pandemic over the last six years [48:37] really eight years 40 million new people came into this market so when we talk about balances being 1.2 [48:45] trillion dollars. That's because we've got a lot more people who had access to this this very [48:51] important source of liquidity. You did have higher prices so balances also went up. That is what drove [48:58] APRs. APRs are not a bank profit. APRs are how we extend credit. Thank you. Thank you. Thank you Mr. [49:04] Chairman. Yes sir. Senator Van Hollen. Thank you Mr. Chairman and thank you for holding this hearing. I [49:11] think it's indisputable that families all over the country are seeing prices and costs go up. In [49:20] President Trump's first year families paid 310 more dollars for groceries than they did in 2024. [49:27] They paid 110 more in electric bills than the year before. Now I think we all recognize that the [49:33] economy is complex and price increases cannot always be attributed to the policies of the president or [49:40] administration. In this case it's pretty clear they can be. Because of the president's tariffs families [49:47] have paid 1700 dollars more in tariff costs. Gas prices are up 40 percent thanks to President Trump's [49:56] catastrophic war in Iran. And so as of last month inflation now stands at 4.2 percent annualized rate [50:04] which is the fastest growth in three years. Now we have heard President Trump say recently that he quote [50:12] loves inflation. He's also said that the affordability is a fake word made up by Democrats. So Dr. Morgan just [50:21] to sort of level set on facts. Is the affordability crisis a hoax made up by Democrats or are people [50:30] experiencing price increases because of the Trump administration policies? It is not a hoax. This is [50:36] something that families are dealing with every single day. And so I want to talk briefly about the other [50:42] side of the affordability equation right. On the one hand we all face costs and prices. On the other [50:50] hand our ability to afford them depends on the income we've got. What money we have in our our pockets or [50:56] bank accounts. And so I do think it's worth taking another look at what was President Trump's signature [51:03] legislative policy accomplishment. He would call it an accomplishment. I think it was really bad for the [51:10] country. And that was their what they called their big beautiful bill which provided huge tax cuts to [51:17] the very wealthy at the expense of everybody else. Dr. Morgan it's correct to say that the wealthiest [51:26] taxpayers benefited the most from that so-called big beautiful bill right? That's correct. The wealthiest [51:33] taxpayer benefited the most and the bill actually cost the lowest income families money because of the cut [51:40] tax cuts to Medicaid and SNAP and other programs. Right. And just to emphasize the point I think we [51:45] should look at this this chart that shows that the richest one percent of income earners got 22 percent [51:56] of the benefit of those tax cuts. And overall the top 20 percent income earners got 72 percent. I will also say [52:07] this distorts the picture over time because some of the tax cuts that went to sort of middle class [52:13] families included things like the no tax on tips which actually is a good idea although I think if [52:19] you're in that income level and your income is not just in the form of tips you should also get a break. [52:24] But those were all sunset right? Those those tax cuts for working people are going to sunset in a couple [52:31] years right? That's right. And so this will get even worse in terms of the distributional impact. [52:36] In fact so bad is the situation that you know the White House tried to reframe and re sort of label [52:45] it's built a Working Americans Tax Cut Act. I mentioned that because I have introduced a piece [52:52] of legislation called the Working Americans Tax Cut Act that gives 100 percent of the tax cut benefits [52:59] to people who are not in the top 20 percent compared to the Trump Republican plan that gives 72 percent of [53:06] the benefits to people who are in the top 20 percent. Let me just turn with my remaining time to overdraft [53:13] fees because families paid more than 12 billion in overdraft fees last year. They can often be small. [53:19] I mean you can go and get a cup of coffee and not realize that your three buck cup of coffee ended up [53:27] getting you a 35 dollar overdraft fee and banks love these. I mean the the rates can be as high as 16 percent [53:35] effective annual interest. In fact they did so well that there was one there was one sort of middle [53:44] bank executive whose bank raked so much in on overdraft fees that they named their boat overdraft. [53:51] Now in 2024 CPB tried to work to rein these costs in but when the Trump administration came in they [54:02] they lifted it and the impact has been as I say 12 billion dollars in overdraft fees. [54:08] Isn't it true Dr. Morgan that overturning these rules hurt consumers and help boost bank profits? [54:15] Absolutely you know the cost to Americans for dialing back this rule is about five billion dollars [54:24] and you know I think it's really important to put this in the context of what we're hearing from [54:29] the representatives of the banks here today. You know the banks will kind of frame overdraft fees [54:34] as something that's necessary to provide a service but overdraft actually used to be a courtesy [54:39] to bank customers and it's turned into a profit center for the banks. So we see the banks [54:45] and their lobbyists fighting really hard to keep these fees in place in order to maintain those [54:49] profits at the expense of consumers and then we see the Trump CFPB really shifting from an [54:55] organization that represented consumers to an organization that represents industry interests. [54:59] Thank you so much. Thank you. Senator Tillis. Thank you Mr. Chairman. Ms. Johnson, have you looked at [55:09] the what I consider to be largely failed attempts to cap credit card rates and other jurisdictions? [55:18] We certainly have. Give me an idea of how the movie ended. Yeah look it never works we have a ton of [55:24] data we've got a ton of history to learn from. Illinois is a great example. I was about to ask you [55:29] about Illinois. Give me what I've seen in the Illinois example they at least one I believe Senator [55:37] Marshall's the other co-sponsor of the the amendment on credit cards so this is not just a Democrat Republican [55:42] thing we have an honest disagreement among Republicans. Go through a few of the things that happened when [55:46] Illinois did the arbitrary rate cap. Look they they even had a 36 percent all-in rate cap and what [55:54] ultimately happened was nearly 40 percent of subprime borrowers simply lost access. 44 percent [56:01] let's see loans to subprime borrowers decreased by 44 percent loans to deep subprime borrowers decreased by 57 [56:09] percent. 40 percent let's see financial well-being sentiment dropped by 40 percent 11 percent reported [56:17] an improvement so doesn't look like it's something that you would consider to be a best practice does [56:21] it no has this been implemented in any uh in any international jurisdictions or other countries that [56:27] you've studied look there's uh how are the results there again remarkably similar right terrible it's [56:33] like my god you know having time again it just doesn't work i don't care which release it is whether [56:40] it's toy story one or toy story five you know it's my god it's not going to end any differently i don't [56:46] even know why we're having this discussion the whole and then the whole concept of not being able [56:51] to rate for risk yes in anything is so important i mean you're helping people from themselves i get [56:59] that it used to be an overdraft fee used to be a courtesy and you know what the last time i checked [57:04] a lot of the banks still give you one or two passes but when it becomes a chronic problem at what [57:09] point are you expected to actually know how much is in your bank account before you write a check [57:13] that's what this is it's nothing more than that it's financial literacy i'll put money into [57:21] financial literacy i'll put money into real time don't write this check because you're about to get [57:26] money and you've over you've gone over the customary limit that banks will actually write off everybody's [57:31] talking about like banks get you it's a profit center i don't know of any bank that doesn't give [57:38] you a forbearance on the first two three four or five overdraft fees but folks at what point do you [57:42] actually have to own responsibility for a bank account i mean it's it to me it's that simple but [57:49] maybe uh maybe i just don't get it um we talk about affordability as if it's something new [57:57] and that's bogus too affordability is always a problem folks it's just a matter of who where [58:02] it is on the margins i've said this repeatedly in this committee i know i know when i had an [58:08] affordability problem is when we weren't living in a house anymore we were living in a trailer and i saw [58:12] the overreach of regulatory and environment and the card administration put me back in a trailer park [58:19] because they were well intentioned but bad poorly implemented policies every time we try to [58:25] artificially gloss over some of the problems that we have here with financial literacy making sure [58:32] that people really understand to spend within their means government tries to help me out and i'll [58:37] be damned if it's not the times it sends me back into that trailer park when we start paying attention [58:43] to the people who are really on the bubble there and i'll tell you right now we got a real problem [58:47] because we got some rich people making a lot of money but we've got some people on the bubble that [58:51] are hurting and instead of talking around all this stuff and coming up with all these artificial [58:57] constructs that have been empirically proven to fail point to one and in fact i've got a minute left [59:04] if somebody's got an example of one of these arbitrary rate caps that have worked i will yield my time and [59:10] you can explain it to me right now i got 45 seconds left i want somebody who has expertise in this [59:20] field to explain it to me right now so when did it succeed i've got a list of all i've asked was a [59:26] simple question point to the one time in the whole history of the world and credit cards globally where [59:34] it's worked once i got it and that is when the giant corporations now you didn't answer my question [59:39] no no i'm not i all i asked was i'm sorry i'll reclaim my time mr chairman i just want one i'll go [59:47] for a second round if somebody needs more time one example of where this precise policy worked [59:55] it's going to be a short discussion as a matter of fact i've got five seconds left now and there's [1:00:00] still no one here that's going to be offering up one successful example my time has expired mr chair [1:00:15] mr chair i will i just can't bear [1:00:20] regular regular regular regular regular regular president let's do this let's listen let's abide by [1:00:27] the rules mr chair rules by the chair mr i've got uh uh senator smith if you are willing i i will give [1:00:36] yes the ranking member 30 seconds and i'll give you a 30 second rebuttal and then we'll go to you [1:00:41] i'm happy to hear that that would be there's an example i want to hear the example i was going to [1:00:45] defer to the ranking uh the ranking member to answer this question and then i would love to have my five [1:00:50] minutes to talk about affordability in small towns we are being civil by the way this is great a public [1:00:56] discourse a public discussion where there's strong disagreement is actually good for the public to [1:01:03] here right okay so i just thank you i just wanted to remind my colleague that back during the covid [1:01:18] crisis the financial institutions all were given free access to overdraft their accounts at the fed it [1:01:29] saved them literally billions of dollars because they could get free access to money when they didn't [1:01:36] have money in their accounts and the government politely asked them to extend the same courtesy [1:01:44] to their own customers which they refused to do and they raked in billions more in profits so it worked [1:01:52] for the big boys it just didn't work for the little guys so it's never worked before but i look forward [1:01:56] to somebody presenting the first successful implementation thank you mr chair all right senator [1:02:01] smith it's your time but thinner smith is still your time well thank you mr chair and ranking member [1:02:09] and um i'm gonna uh shift this conversation to um i want to i want to understand and have a bit of a [1:02:16] conversation about how the affordable that's a so-called affordability agenda is working in small towns and [1:02:21] rural places and dr morgan i have a question for you you know i come from minnesota this is a place where [1:02:26] food and agriculture are economic drivers in my state and farmers are telling me that things are [1:02:32] tough that in fact it is so much harder to afford um to run their businesses than it was just a couple of [1:02:39] years ago farm bureau says that farm bankruptcies were up nearly 50 percent last year and minnesota [1:02:46] has some of them has the most farm bankruptcies of any place in the country in the first quarter of 2026 so [1:02:53] what's driving this i mean first fertilizer fertilizer prices diesel prices input costs for farmers are [1:02:59] going they're the highest that they've been in years and then of course the chaotic tariff policy has made [1:03:05] it very very difficult for minnesota producers to find access to markets that were um their markets even [1:03:12] just a year or so ago um so it's pretty clear to farmers in minnesota that this is a bad situation for [1:03:18] them i'm wondering could you talk to us a little bit about um how this affordability excuse me how [1:03:25] this affordability agenda looks like for farmers in this country yes absolutely so you hit on many of [1:03:32] the main points here fertilizer prices um spiked after the trump tariffs went into effect in fact the [1:03:39] trump administration had to actually actually exempt a number of fertilizers from those tariffs [1:03:44] um and then they jumped again with the war with iran so um you know we're seeing both fertilizer prices [1:03:51] up high as you mentioned diesel prices are up electricity prices are up as well and all of these [1:03:57] are squeezing um small farmers who are just trying to stay afloat and who often have very thin margins [1:04:03] i think it's really important to point out that for people living in rural communities that's kind of [1:04:08] just the tip of the iceberg right so right in addition to what they're dealing with in their small [1:04:12] businesses you know we've found that school districts across the country are really struggling [1:04:17] with many of the same affordability challenges that individual families are struggling with [1:04:22] including higher electricity prices higher gas prices especially in rural areas where busing [1:04:27] is a really big component of a school systems budget um and then the cuts to the trump administration [1:04:33] and congressional republicans have made on health care right and i'm really glad you raised this [1:04:38] because this is a huge issue um uh the i mean i mean talk about the you think about the economic [1:04:44] impact of rural hospitals as just one example on the economic vitality of small towns not to mention [1:04:50] the importance of having access to health care in small towns and rural communities and so you know [1:04:55] talk a bit about that and what those what those impacts are on rural communities in terms of [1:05:00] their ability to afford stuff and get access to the stuff that they need yeah absolutely so we're seeing [1:05:04] kind of a double whammy here from the impact of tariffs which have also had an impact on health [1:05:09] care pricing for the services that hospitals offer um as well as the impact of the cuts to medicaid the [1:05:15] failure to extend the aca tax credits um and so you know rural hospitals are the ones that are being hit [1:05:21] the hardest and what we're seeing is that they're pulling back on services so people are having to [1:05:25] drive farther and farther to get access to really basic services like emergency um emergency services or [1:05:32] maternity health so it's it's turning into a really big crisis it's the kind of situation where [1:05:37] people can really feel the affordability crisis every time they try to get a doctor's appointment [1:05:42] or seek emergency services and so i want to just um take a minute also to talk about the impact on food [1:05:48] so first you've got the question of what is the residual impact on global food prices with the lack of [1:05:54] access to fertilizer that's happened because of the iran war and what that means about food prices [1:05:59] going up potentially um as we get into the second half of this year and that'll of course have [1:06:04] an impact on all communities not just rural communities could you address that yes the price [1:06:08] of food has gone up pretty much across the board you know the century foundation and the groundwork [1:06:13] collaborative have put out a number of reports tracking the cost of of foods we typically tie [1:06:19] them to holidays so you see the cost of hams going up the cost of hamburgers going up around [1:06:24] memorial day um halloween candy and so you have this kind of uh rise in price that we're seeing [1:06:30] people and i know the cba alluded to this um putting onto their credit cards um you know but we've also [1:06:37] had this enormous dialing back of snap benefits so four million people have lost access to snap benefits [1:06:44] and are you know really struggling to find food which is where we see these findings that about one in [1:06:50] three people are actually skipping meals in order to try to endure this affordability crisis and if [1:06:55] you add on to that that the so-called one big beautiful bill included this big cost shift onto [1:07:01] counties many of them read counties who are now having to pay for more of those snap benefits that [1:07:06] they did in the past and that's putting a huge pressure point on county budgets and is forcing [1:07:11] counties to think about additional cuts to snap which is also going to make it that much harder to [1:07:15] afford your life in small towns and rural communities thank you mr chair yes ma'am [1:07:20] senator kennedy thank you mr chairman i have to say i'm a little disappointed um you all seem like [1:07:37] fine people um and here's and mr i can't see mr carbone you're you seem to be here to promote [1:07:54] cryptocurrency i love cryptocurrency but i don't think that's the problem with our economy um mr brown [1:08:02] you're here to promote realtors i love realtors but that's not gonna solve our economic problems [1:08:11] ms johnson's here to promote banks i love banks um dr morgan [1:08:17] um is here to bash trump without telling us that she formerly was part of the biden administration [1:08:29] and worked for mr shopra to see cfpb and that your policies caused inflation to go to nine percent [1:08:39] i think that those would have been relevant things to to tell us i guess you thought we were going to look [1:08:45] up your background um can we agree that the problem of affordability is the prices are too high [1:08:53] duh does anybody disagree with that and prices are too high because of inflation does anybody disagree [1:09:04] with that and inflation despite dr morgan's political beliefs uh is not just a trump problem [1:09:17] it was a baton problem was it not okay so here's here's my question to you let's start with you [1:09:26] ms johnson how do you get prices down that's what we're here for how do you get prices down well we [1:09:35] think a lot of the things that you all are doing focusing the committee on the the sources tell me [1:09:40] how to get prices down you increase supply and you make sure you cut the red tape you increase supply [1:09:46] okay um some people want to talk about deflation are you are you if you believe in deflation as we see [1:10:01] it in the world of that you need to change your meds china's got deflation how's it going for them [1:10:08] they've got about a 20 percent unemployment rate for their young people the only way out of the [1:10:16] inflation is to grow our way out of it am i wrong you're going to have to increase our economic growth [1:10:25] not at the top line but so people feel it you're going to have to increase wages and to do that [1:10:34] do you disagree with mr brown we're going to have to grow the pie right or wrong well senator um first [1:10:44] of all i'm i'm here to support home ownership uh in in warning homeowner no disrespect whatever i'm [1:10:51] sorry if i offended you how do you think we can get out of these high prices other i mean you can [1:10:59] you can try to go uh promote deflation get ready for 10 percent unemployment okay then dr morgan's [1:11:07] really going to be bashing us okay tell me how we grow our way out of it i don't see any other way [1:11:15] to deal with inflation i think but but to grow people's wages i i think that we uh increase inventory [1:11:22] we reduce zoning restrictions we do a lot of the same things that are and how are you going to [1:11:27] how are you going to increase inventory by who and who have homes the inventory businesses you're [1:11:34] going to have to stimulate the economy and help businesses to grow aren't you well i i come from [1:11:40] california which is ground zero for the lack of housing affordability and it's a little more [1:11:45] complicated than that i don't think you want to answer my question ms johnson aren't we going to have [1:11:50] to grow the economy and therefore increase wages in order to help people deal with the inflation if [1:11:56] i'm wrong tell me if there's a better way tell me i think growth has been a key driver consumer [1:12:01] spending continues to be strong it's what's driven us through uh one of the most tumultuous times that [1:12:07] we've been through including uh bringing you know historic high inflation we also do need to address [1:12:13] prices they and i think the fed's focused on it price stability has got to be key okay yeah so we [1:12:18] basically have we're free enterprise in america we're basically to grow the economy you've got to [1:12:25] stimulate businesses and and and and uh uh try to direct labor to share in the growth is that right [1:12:37] okay dr morgan are you democratic socialist like your colleagues no you're not do you i noticed that [1:12:45] y'all's new policy is to create a four-day 32-hour work week with no loss in pay [1:12:52] where are we going to get the money to do that that's not my policy you don't think we ought to [1:12:56] do that i'm sorry uh you think we ought to have a federal jobs guarantee i think a federal jobs [1:13:03] guarantee is a good idea yes no you do okay how do you think we're going to pay for that fairy you [1:13:08] believe in the easter bunny do you i think it's incredibly hard to pay for these things when we're [1:13:12] giving tax cuts to the ultra rich yeah okay you think you think that all the growth in in our economy [1:13:19] just goes to the ultra rich i think that we just gave massive tax cuts to the wealthiest in this [1:13:25] country yes yeah yeah you you are democratic socialist don't you i have never used that term [1:13:32] to refer to myself no i know you have a nazi tattoo excuse me do you have a nazi tattoo i don't have [1:13:37] any mr chairman okay thank you senator kennedy and we have senator cortez masto thank you let let me um [1:13:46] put this back on track one so much for for attending today i can tell you how we grow the [1:13:51] economy and i what a perfect example we got culinary members here in the audience culinary [1:13:56] are part of our service industry nevada the industry is our tourism trade industry which by the [1:14:01] way uh posts nearly a 14 billion excuse me trillion dollars in revenue in this country but because of the [1:14:09] bad policies of this administration we are not growing that economy in fact there's a 14 billion [1:14:15] dollar trade deficit in 2025. why because this administration has cut medicaid they have chaotic [1:14:21] tariffs the war of choice in iran uh the the barriers put in place of so many that want to [1:14:27] travel to the united states the bad policies the high costs that leaves less discretionary funds for [1:14:34] families to travel that is part of the problem so we can eliminate some of the policies of this [1:14:39] administration that will help grow the economy and i will tell you i believe with the culinary one [1:14:43] job should be enough in this country one job should be enough and you should be able to afford put [1:14:48] groceries on your table to pay your energy costs put a roof over your head and so much more and afford [1:14:54] health care in this country that's what it's about and so i appreciate all of you being here because [1:14:58] that's a conversation we have and one of the pieces of the puzzle here is housing in a roof over [1:15:03] your head and i was so pleased to see in a bipartisan way that we passed the road to to housing here the [1:15:10] 21st century road to housing i thank the chairman i thank the ranking member everybody here that [1:15:14] worked on that in a bipartisan bicameral way but now we have to fund it we have to remember there's [1:15:20] programs in there that need to be funded one of them is the home program that i was very pleased [1:15:26] to be able to actually put the legislation and to modernize the home program so mr brown let me ask [1:15:33] you this question why is the home program so important for building more affordable homes and [1:15:38] increasing that supply actually i don't know if you have your speaker on we do support the home [1:15:46] program which section is that senator that is in the road to 21st century housing that's the program [1:15:52] yeah that's the one that actually funds finances federal dollars that come into states for the home [1:15:57] program to help finance supply uh if you're not familiar with it happy to have one of the other [1:16:03] no no i i think it's very important um i think that overall this um this bill is extremely important to [1:16:10] increasing um affordability in in the housing market because you know you're cutting red tape [1:16:17] you are uh cutting regulatory burdens and you're increasing inventory and i think that's the way [1:16:23] that we're we're going to be able to tackle the affordability crisis and i think that this bill goes [1:16:28] a long way it's it's a great start i mean more work can be done but it's really there's some really [1:16:34] good things in this bill that are really going to help the affordability housing affordability crisis in [1:16:40] america and that's the key right but it's one thing to pass it now we have to authorize the [1:16:44] appropriations for these programs the home program is a a grant program through hud that brings that [1:16:49] those essential dollars federal dollars into our communities to build housing um and affordable [1:16:55] housing affordable housing that's it's extremely important we authorize it thank you i appreciate [1:16:59] that um let me talk to um dr morgan i i have been concerned with what i'm watching happening with [1:17:07] the cfpb um as the former attorney john nevada i work closely with cfpb to protect consumers and now [1:17:14] we are uh this administration has systematically eliminated uh the cfpb um and i am concerned now [1:17:20] um with what that means for consumers in general in americans um nearly 22 million families pay more [1:17:29] than half their income to keep a roof over the head yet the president's proposal to cut funding for [1:17:34] affordable housing programs like home and gut the cfpb bureau doesn't help families who have seen rents [1:17:41] rise 50 percent since 2020. how does the president's decision to cut and gut the consumer financial [1:17:48] protection bureau enable landlords to still charge junk fees to renters are they is that still happening [1:17:55] in this country yeah it's a really good question so you know the gutting of the cfpb has taken the cops [1:18:02] off the beat so there's really no one kind of minding the store for consumers and making sure that [1:18:09] financial institutions are following the law it gives a green light to predatory companies to break [1:18:16] the law as they see fit and you know when this comes when it comes to renters in particular the cfpb had [1:18:22] really been watching this kind of like proliferation of products that were being put into the market in [1:18:28] order to bridge the gap between rent and what people could actually afford um rental credit cards [1:18:34] different kinds of uh you know innovative payment processing platforms um uh security deposit replacement [1:18:42] products that turned out to be a loan or kind of a shady um another kind of shady product and so not [1:18:48] having the cfpb in place to actually crack down on those practices um is really important the other role [1:18:54] that the cfpb plays is on the the research and market side there they were the organization that [1:19:00] was keeping an eye on what was happening with family finances keeping an eye on household financial [1:19:05] stability raising the alarm when household financial stability became a larger problem that threatens the [1:19:10] economy overall and they're not doing that either so there are a lot of threats here for renters and [1:19:15] homeowners alike thank you i know my time is up thank you mr chairman thank you senator and on behalf of [1:19:21] the chairman uh senator ricketts i'd like to thank the chair and ranking member for holding the hearing [1:19:28] here today talking about affordability now i'm going to start with a topic i typically bring up in [1:19:34] environment and public works but since we're talking about affordability i'm not going to miss the [1:19:38] opportunity here and that's about biofuels i know uh senator rounds knows all about this uh biofuels are [1:19:45] a win-win-win they save consumers money at the pump it actually helps clean up the environment and it's [1:19:51] great for our farmers and ranchers in fact uh last weekend i filled up at my local hy-vee and saved [1:19:56] 55 cents a gallon on e10 which is a 10 percent blend of ethanol compared to the regular 87 octane [1:20:02] gasoline if we pass e15 that would allow for even more savings for americans put more money back in [1:20:09] americans pockets i was glad to see the house pass my congressman adrian smith's e15 bill so i want to [1:20:16] work with uh senator fisher on getting that passed in the senate side so i'll put my little plug in [1:20:20] for that but uh one of the other things we're talking about is the road to 21st century housing [1:20:24] bill that we passed and why that was so important you know one of the things that we saw was that [1:20:30] home ownership 10 years ago the first time home buyer was 31 years old and today it's 40. [1:20:35] and addressing this it's not a new problem when i was governor of nebraska we had the same sort of [1:20:40] issues with regard to enough housing stock i think mr brown that's one of the things that you [1:20:45] references we got to have more houses you have more houses you bring the the cost down so that's [1:20:51] one of the things we can do and so one of the things we did when i was governor was create the [1:20:56] rural workforce housing fund to be able to create this fund that would work with communities and [1:21:00] developers to create more housing stock and that is the goal of what we're doing here with the 21st [1:21:05] century housing bill is to try to find more ways to create more housing stock so working with [1:21:10] chairman scott and the rest of the banking colleagues here we're working on making housing [1:21:14] more affordable for nebraskans the house passed its bill we voted on ours i've put a number of [1:21:22] common sense 21st century road to housing act bills into this so we can build more homes it includes [1:21:28] priorities to be able to help break ground quicker one estimate regulations for example count for about [1:21:35] 25 percent of the cost of a single family home for an apartment building it's actually 40 percent [1:21:40] it's even more this is burdensome and duplicate regulations that add to the cost of homes but [1:21:46] also extend out project type lines the longer it takes to build a house the less available those [1:21:51] units are going to be as well in nebraska housing projects often draw both hud and usda money for a [1:21:59] portion of their funding and those processes both those agencies have their own processes for reviewing [1:22:06] and inspection and they can also be very overlapping creating confusion bureaucracy so one of the things [1:22:13] that i put in the 21st century road to housing act was a streamlined rural housing act which will [1:22:19] require hud and usda to work together so they can instead of doing duplicative processes and serial [1:22:25] trying to put them in parallel to be able to make that more efficient the bill also directs the [1:22:30] agencies to work together on cutting other red tape eliminating those delays will help get that money [1:22:35] out faster which means then that money will get go to building homes homes faster so that's an important [1:22:41] part of what we're trying to do here another issue is breaking ground on a project for nepa reviews [1:22:47] on land that's already gone a past review for example sometimes the national environmental policy act or nepa [1:22:53] requires a view for power water lines and development areas that have already had them these are known [1:22:59] as infill sites the rural housing regulatory relief act that i introduced would streamline nepa reviews [1:23:05] for projects that pull funding from both from usda and are located on infill sites again eliminating this [1:23:12] duplicative and unnecessary regulations is a common sense will help speed up housing construction so mr [1:23:18] brown i've talked about a couple of these what kind of impacts do these kinds of reforms have on [1:23:22] project costs timelines and completion so you you just hit the top three zoning regulatory and environmental [1:23:31] um those are the things that really delay projects that add to the cost your your your estimates are [1:23:37] spot on adding about 25 to 26 percent of regulatory costs before you even break ground which is is really [1:23:45] a huge barrier for a developer or builder in the marketplace 40 percent for multi-family uh before [1:23:52] they even break ground so this bill does a tremendous job at cutting some of that red tape and i think it's [1:23:59] it's going to be a great step in terms of producing more housing inventory uh multi-family and single [1:24:07] family dwellings in this country so by cutting some of this red tape then we'll be able to reduce the [1:24:13] timelines is that accurate yes reduce the timelines uh streamline the process which means it's going [1:24:19] to be less expensive to build great well these are the kind of common sense reforms that we want to [1:24:23] put in the package to be able to help make sure this got done which is exactly the point so thank you [1:24:27] very much uh mr brown and to all of our witnesses thank you thank you chair thank you sir senator reverend [1:24:33] dr brother warnock well thank you so much your your introduction was pressing you'll see why brother [1:24:41] chair according to a recent fox news poll more than half of all voters feel that president trump's [1:24:51] economy only helps rich people with an additional 15 percent saying his economy helps quote no one and [1:25:01] that same fox news poll found that three out of five voters feel pessimistic about the economy [1:25:08] doesn't matter much what those of us on this panel feel what the american people feel consumer sentiment is [1:25:16] near record lows ordinary americans know donald trump's economy isn't working for them dr morgan you're an [1:25:24] expert on the economy i don't know your faith tradition or if you uh share a particular faith tradition at all [1:25:35] but i'm a matthew 25 christian meaning i like to center my work on the least among us the poor the most [1:25:45] marginalized uh isaiah whom i've been reading a lot lately says who are you to crush my people to grind the [1:25:53] face of the poor so i want to dig into that verse from matthew 25 to assess the trump economy it says [1:26:03] for i was hungry and you gave me something to eat i was thirsty and you gave me something to drink dr [1:26:09] morgan how have the president's policies been for hungry americans um senator warnock the the president's [1:26:16] policies have pushed more and more americans into hunger we've seen actually four million people lose [1:26:24] their snap benefits under this administration as about 700 000 of them were children um and the [1:26:31] century foundation's own polling shows that one in three americans have skipped meals um in order to [1:26:38] deal with their uh their cost of living crisis you said four million americans and you said 700 000 [1:26:46] of the americans kicked off of snap are children that's right um because i i've met with the speaker [1:26:53] and others and you know they saying that they're that you know these are well by able-bodied men [1:26:58] who are kicked off a snap but you're saying these these cuts are leaving children food insecure [1:27:07] let's try another one um the text goes on to say before i need it closed and you clothed me dr morgan how [1:27:13] have the president's policies been for poor unemployed or unhoused americans the president's the tax [1:27:20] cuts alone had a massive effect on low-income families uh low-income families actually lost [1:27:27] money under hr1 um to the tune of about 1200 that's the one big beautiful bill that's right [1:27:35] but the trump administration has also taken other actions that directly target poor and unhoused [1:27:40] families you know the trump administration has attempted to impose time limits and work requirements [1:27:45] on rental assistance um they've proposed cuts and changes to programs that support the [1:27:49] homeless and then rising utility costs are also hurting the poorest families as well [1:27:55] matthew 25 says where i was sick and you looked after me what about the president's health care [1:28:01] policies especially when it comes to health care affordability this is really an acute problem for [1:28:07] families right now we've seen cuts to medicaid that have taken insurance away from families we've seen [1:28:13] the failure to extend the aca premium tax credits that has jacked up the cost of health insurance [1:28:19] premiums for many american families we're also seeing increasing costs on employer sponsored [1:28:24] plans so people are really faced with the choice right now of being uninsured or choosing you know [1:28:30] kind of like a skimpier health insurance plan in order to get coverage and at the same time the [1:28:35] trump administration and washington republicans cut one trillion dollars out of medicaid they call it [1:28:41] waste fraud and abuse is it fair to say they cut more than waste fraud and abuse that is correct [1:28:46] they cut care for american families before i was a stranger the text says and you invited me in how [1:28:52] has the trump economy been for law abiding immigrants and dreamers living in the shadows [1:29:00] we've seen a kind of xenophobic attack on our immigrant neighbors we're seeing families who are [1:29:07] afraid because of the actions of ice to go to work and to send their families to school [1:29:13] um it's incredibly crushing both for those families and for their communities and those of us who who [1:29:19] live among people and then we've also seen this um these attacks to try to take away benefits and [1:29:25] programs from law-abiding immigrants so it's hugely concerning so who served by this economy that's a [1:29:31] long range of people who seem to be suffering who served by the economy the trump economy i mean it [1:29:36] serves the rich right it serves donald trump itself himself it serves his um his uh billionaire colleagues [1:29:44] and um it serves you know the banks who are represented here at this hearing who have gotten [1:29:49] the trump administration to roll back protections um for working families in order to maintain their [1:29:54] profits all right i'm a few seconds over and so i'm going to bring this to to closure brother chair [1:30:00] but donald trump has been president for 18 months and while he and his advisors love to blame [1:30:06] joe biden uh joe biden joe biden for rising costs americans elected him the lower cost he's been at [1:30:13] it for 18 months he's raised costs for everybody shredded the safety net meant to catch people during [1:30:19] tough times this trump economy isn't just bad for me it's a moral abomination this is bigger than [1:30:27] politics it's about humanity thank you so much for your testimony senator banks thank you mr chairman uh [1:30:35] mr brown as you know the road to housing act passed the senate yesterday we expected to pass the house [1:30:41] today and uh hopefully be signed by the president very soon uh there there are many important parts [1:30:49] of the bill uh i think i think the bill is significant there are some who say that it's not [1:30:53] but i think it's a significant bill that will go a long way to help uh solve the housing crisis and [1:31:00] help your members do what they do to serve families one one part of the bill that i authored along [1:31:07] with senator warner on the other side is called the reside act that's fairly common sense but it [1:31:13] would allow communities to compete for grants and take empty warehouses old factories dead strip malls [1:31:21] shuttered hotels and then turn those structures into housing i had a lot of mayors across indiana [1:31:28] republican and democrat mayors of small towns big cities um all agree that that would that would be [1:31:35] a new tool for them that they could use to solve the housing shortage in their communities but i [1:31:40] i wonder if if you agree that that would be helpful what are some other parts of the road to housing act [1:31:46] that you think are significant that will go a long ways to helping us address this issue you know i do [1:31:52] agree in that i think that's a very important provision there there's lots of underutilized commercial [1:31:58] structures throughout america they're just sitting there vacant in fact in my own business i we [1:32:04] sold a uh commercial warehouse in an opportunity zone to um to a buyer who then developed it into [1:32:13] residential units and i think that that is a great example of how you can take an underutilized [1:32:18] commercial structure that's not producing anything housing or income or anything converted to [1:32:25] actual uh living unit units where people can live um i think that there's a lot of provisions here [1:32:32] especially the streamlining um of the process to reduce cost um helping out with zoning helping out [1:32:41] with an environmental reducing the environmental um layers of environmental in terms of developing [1:32:47] housing i think that's very important it this just hits so many areas that's going to reduce time [1:32:53] and reduce cost and streamline processes but back to your original comments um i think that's a very [1:32:59] important part especially as it pertains to opportunity zones not not maybe the bill's not a silver bullet [1:33:06] but we'll go a long way you believe that yeah i think it will over time i think it will is there a [1:33:10] silver bullet out there that the committee should be looking at that would address the um there there [1:33:16] there i we haven't come up with a silver bullet yet but next i hope that um that congress really looks at [1:33:22] really looks at more homes on the market act i think that you know i made him comments when i [1:33:27] uh first started the hearing that i i really believe that if um we can double the capital gains [1:33:35] exclusion it's going to add instant inventory to the marketplace and in doing so it's going to re [1:33:40] reduce some of the housing prices yeah i which i fully support miss johnson can you talk about why [1:33:46] mortgages are costing more i mean what are the what are the rules and regulations and fees that are [1:33:51] being added that that's making mortgages so darn more expensive than what they used to be thank you [1:34:00] for the question you know the last 10 to 15 years in particular it's really been a combination of [1:34:04] heightened capital requirements there's regulatory scrutiny that banks non-banks all have to go through [1:34:10] there's litigation risk there's operational burdens uh and so there's been a focus on one the supply [1:34:16] issue which we think is first and foremost the most important thing but there's also been an intent [1:34:20] focus from the administration of increasing bank participation i think that there is a real need to [1:34:28] increase bank participation in this market so that you have more competitive options for borrowers [1:34:32] and we're excited about the executive order we've been very uh pleased that there's a recalibration [1:34:37] in the basel proposal on mortgage i think that that'll go a long way to reduce costs any big ideas [1:34:42] we're missing here i think your focus on supply and using a carrot stick approach is absolutely the [1:34:48] right one and mr carbone um in plain terms can you explain how dollar backed stable coins lower everyday [1:34:55] costs for people who are under banked or paying too much in transaction and remittance fees absolutely [1:35:03] thank you for the question senator right now the average remittance fee in america takes 6.5 percent [1:35:09] so for every hundred dollars an american is sending overseas the recipient is only getting 93.50 and [1:35:15] it takes three to five days to get there with a dollar backed stable coin they can send it [1:35:19] instantaneously and almost for free that is a huge example as well we're already seeing through the [1:35:24] gene after the genius act passed cheaper more competitive payment options for americans we're [1:35:30] starting to see merchants start to incentivize users like gas stations incentivize users to pay cash [1:35:34] instead of credit incentivize users to pay with dollar backed stable coins regal cinema right now [1:35:39] is giving 10 percent off all tickets and concessions if you pay in dollar backed stable coins instead [1:35:44] of using credit or cash so the genius act is working we're seeing more competitive payment options for [1:35:49] payments and for remittances good to know thank you i yield back thank you sir senator lbr thank you mr [1:35:58] chairman and thank you also to the witnesses for being here today i want to start off by just expressing [1:36:04] my deep gratitude to the chairman and the ranking member for your leadership and all of my colleagues [1:36:11] on the passage of the bipartisan 21st century road to housing bill this landmark legislation is something [1:36:21] that i think america has been waiting for for over three decades and so i am just grateful to the [1:36:28] members here who worked on it i think we took a great step forward in addressing our housing supply [1:36:34] crisis many of the bills that i secured in the package will empower local communities to tackle housing [1:36:41] affordability by encouraging zoning reform reducing red tape and unlocking innovation looking very forward [1:36:49] to to seeing that become law and also looking forward to road point two 2.0 just putting it out there [1:36:56] manifesting that and finally i want to extend appreciation as well to the house members for for [1:37:03] passing because we're going to speak that they're passing it and we will see it signed into law and [1:37:10] today as we talk about the housing affordability crisis we also think about the broader crisis of [1:37:18] affordability and i know um the chairman talked about the one big beautiful bill putting forward 250 a [1:37:26] month for many american families but all i could think of were the calls and the people that i see in my own [1:37:33] state folks who are paying 50 to 80 to fill up their gas tank constituents who have written in and said [1:37:43] i because of the lack of aca tax credits i now have chosen to just give up insurance which means that [1:37:53] health insurance could roll into medical debt and it has an impact on all of our costs i think about [1:38:00] folks who are food insecure right now and and the cost of food whether it's at the supermarket or if you [1:38:06] could even go to a restaurant and i don't think that that covers what people are feeling and so [1:38:15] for me yesterday i was able to with my congressional delegation senator coons and congresswoman mcbride we [1:38:23] held a round table for veterans in our state it was a veterans round table and um at the round table we [1:38:31] had representatives from you know different um veterans organizations and then we held a resource [1:38:37] fair in addition to the round table and we kept coming back to this issue of cost and them not being able [1:38:47] to afford to live these are people who are our neighbors these are people who have served this country and [1:38:52] who are serving this country and between um the issues of homelessness the issues of suicide um the [1:39:02] issues of again just being able to make ends meet uh it really became clear that they are feeling the [1:39:10] brunt in a way that many of us don't even feel and so dr morgan i i wanted to ask you about the cfpb [1:39:18] which has historically played an important role in forcing the military lending act and protecting [1:39:24] service members from predatory financial practices has the cfpb uh reduced its enforcement of the mla [1:39:35] the cfpb has reduced its enforcement of the mla yes and has reducing that enforcement hurt affordability [1:39:42] for military families and can you talk a little bit about how yes absolutely and i just say to your [1:39:48] earlier point you know there is research that shows that those tax cuts are really wiped out by the [1:39:54] cost of the the war with iran so you know when people are coming to you and saying this doesn't [1:39:59] add up it doesn't add up um but in terms of um you know military members the cfpb has stepped in over [1:40:04] the years many many times to protect military military service members sorry from predatory practices by [1:40:11] lenders by allotment processors um student loan servicers and others and then under the trump [1:40:17] administration you know we've seen this massive dialing back of enforcement and supervision to [1:40:22] the point of non-existence um and people don't even have a place to file a complaint anymore and this [1:40:27] really lands hard on military service members and in fact the cfpb has actually walked away from [1:40:33] lawsuits and settlements that would have put 80 million dollars back into the pockets of military [1:40:38] service members who were suffer uh subject to illegal practices it's is my understanding that [1:40:44] since 2011 service members from all 50 states and every military base have filed more than 400 000 [1:40:52] complaints to the cfpb and that there there was a complaint database can you just tell us why was the [1:41:00] office of service member affairs at the cfpb created in the first place and what are the consequences [1:41:06] of weakening the protections as well as lessening the staff and shuttering offices it's a really good [1:41:12] question um you know you only have about 15 seconds to answer this question okay financial [1:41:18] could i have the time that um louisiana had no ma'am a little bit longer i will just say very quickly [1:41:24] that financial readiness is a critical component of military readiness so when people are distracted by [1:41:29] dealing with predatory lenders at home or when their security clearances are held up based on a debt [1:41:35] collection that they shouldn't owe that affects our ability to fight wars and to keep our country [1:41:40] safe so this is a really critical component of the overall picture on defense thank you these are the [1:41:45] people who protect us we deserve and they deserve to have our protection as well thank you and i yield [1:41:51] back senator moreno well let me uh just start my uh portion by complimenting uh you mr chairman and [1:41:57] actually our ranking member i think what we got done here in road housing act was uh monumental uh it [1:42:04] obviously also is an indictment on the person who used to occupy your chair because obviously he was [1:42:08] unable to get anything done so to both of you kudos and to your predecessor shame on you in terms of [1:42:15] uh where we've been hearing a lot about today is the word hoax now i learned english uh as a second [1:42:20] language when i was about six seven eight years old some would say i still haven't learned it completely [1:42:24] the word hoax can uh sometimes be made to see that something's not real uh but it actually means [1:42:31] deception that there's a deception going on uh mrs johnson what was the average inflation [1:42:38] cumulative inflation during the biden years do you know i know it reached a peak of 9.1 it did [1:42:43] so cumulatively it's 21 and a half percent under president trump it's cumulatively five percent [1:42:49] your represent bankers is five less than 21.5 yes it is so when somebody creates 21 and a half percent of [1:42:59] cumulative inflation inflation and then the next person creates five percent cumulative inflation [1:43:06] and the people who did the first part blamed the second one for price increase it's a hoax so let [1:43:12] we got that out of the way now uh mrs johnson i do want to talk about um some of the things that [1:43:19] have been brought up about banks why do you post deposits after withdrawals at most of your financial [1:43:26] institutions most banks for example in ohio that receive deposits those deposits don't credit the [1:43:38] person's account until after withdrawals and a lot of that results in overdraft fees that's something that [1:43:44] you guys can either do voluntarily or you're going to make us pass a law to do that because it's crushing [1:43:50] working in americans and it's fundamentally unfair well thank you for the question look there is there was [1:43:58] a lot of technology on the back end and a lot of just just do it the right way just do it the right [1:44:01] way you shouldn't you shouldn't have people whose paychecks are coming in uh and you don't take that [1:44:07] into account until after you've counted all through it's wrong just bad practice just don't do bad things [1:44:11] and make us have to uh uh do that in turn you you were talking about also these zero percent interest [1:44:17] offers nothing has crushed working americans more than zero percent interest offers where now you have [1:44:24] uh compounding interest that's due as a result of these offers and these people get absolutely [1:44:30] destroyed and crushed don't do things like that and certainly don't take a victory lap for offering [1:44:37] those types of things all you do is you give an opening to the people who think that that kind of [1:44:41] bad behavior is unnecessary could i give just a quick quick response here sure so a couple of things [1:44:47] one aprs are comprised of a number of different things cost of funds credit risk fraud operation i i i get [1:44:53] all the increase in aprs has been driven primarily i'm talking about compounding interest the fact [1:44:58] that you send people magic checks that make them think that zero percent interest they miss the the [1:45:03] the payment by one day and you pay retroactively for every single month yeah just i'm just telling [1:45:09] you look if you want to have if you if you want to have good cooperation from people who care about [1:45:16] working americans which is republicans and democrats don't do things like that that's just my advice [1:45:20] you can take it or not take it uh in terms of uh you mr brown what is the position of the national [1:45:25] association of realtors when it comes to the institutional investor ban institutional investor [1:45:32] ban yes prohibiting large giant wall street firms from buying homes in the mls competing with ordinary [1:45:39] americans is that a good thing about that um i i think that um institutional investors are a problem in [1:45:44] some communities they're certainly not the cause uh i'd say there's a cause do you support not having [1:45:50] institutional investors compete with individuals to buy a home yesterday yes you do good okay [1:45:55] perfect and i'll turn over to you mr mrs dr morgan sorry what does a dozen eggs cost today uh the [1:46:03] last time i bought them where i lived it cost about seven dollars oh my god you need to move uh you would [1:46:08] fail the prices right dramatically uh the average price of a dozen eggs is two dollars and 19 cents [1:46:15] we are going to send the police after the grocery store where you do business uh do you know what it [1:46:19] was under biden obviously you don't because you didn't know now it was 265. is 219 less than 265. [1:46:26] it is okay perfect so then prices for eggs have gone down from biden to trump uh what's the price [1:46:33] of a barrel of oil today i don't i don't know off the top of my head i think it was a hundred dollars [1:46:37] a barrel it's 73. okay what was the average price during the biden years i don't know it was 82. so [1:46:44] the price of a barrel of oil has come down what is the price of the mo what is the most commonly [1:46:49] used fertilizer for farmers i don't know it's nitrogen what is the cost per ton under biden [1:46:55] for nitrogen fertilizer i don't know but can i so it was it's a thousand dollars a ton it peaked out [1:47:01] at 1600 and now it's 800 half of the peak under biden let me just would just you're good you are [1:47:07] not the contestant on the next prices right you would not do well okay in terms of electric vehicles [1:47:12] do you think it's good public policy to offer seventy five hundred dollars to multi-millionaires to lease [1:47:16] foreign luxury vehicles i don't believe i don't believe that's happening no it's not happening [1:47:21] you're exactly right uh that when you got correct it's not happening because republicans got rid of [1:47:25] that working families tax cuts it was absolutely happening under the biden years in fact 250 000 [1:47:31] people got seventy five hundred dollars to lease luxury electric vehicles was that a good decision or [1:47:37] bad decision i senator moreno i think these questions are very important but i just have to say [1:47:42] donald trump is the president right now and prices are extraordinarily high people are not [1:47:47] eggs not oil not fertilizer and now we have i just i just think now we have prescription drugs [1:47:55] prescription drug prices on trumprx.com are down 85 to 95 percent for 836 of the most commonly used [1:48:01] drugs we've tried so my my point is that when people create a forest fire and then blame the other [1:48:08] person for said forest fire i would call that a hoax thank you mr chairman senator you now have six [1:48:15] minutes thank you so much mr chair uh to you and felice cumpleaños to our ranking member who just had [1:48:20] a birthday yesterday um you know this was the saddest exchange um that i've seen and with all due respect [1:48:27] i think it really does underscore the problem that we have in our country right now too often in these [1:48:33] bodies i think the people who sit here don't shop like uh the people that we represent they clearly [1:48:40] are so out of touch you know with all due respect my colleague just said that the price of eggs is two [1:48:45] dollars and something i don't know what in the world grocery store i don't know that people even [1:48:50] grocery shop apparently for themselves because i was in i'm in the grocery store every week and i'm paying seven [1:48:55] dollars uh for a dozen eggs and that is the issue that we face right now so i appreciate the [1:49:01] opportunity to talk about affordability because the reality is that this in this administration [1:49:06] we are now in an economic disaster in our country and this is not hyperbole the people in america are [1:49:12] tired of being told not to believe their lying eyes those who shop like who buy gas who pay for [1:49:18] utilities we are living a whole different existence apparently than the people who are supposed to [1:49:23] represent us these are the facts 4.2 percent this was may's inflation rate and the prices have risen [1:49:30] steadily under president trump's uh administration they are the highest as a matter of fact that [1:49:36] they have been in three years almost four dollars this is the average national price for a gallon of [1:49:41] gas gas is the most expensive that it has been literally in three years two two thousand five [1:49:48] hundred dollars this is the estimated cost every american family is paying because of president trump's [1:49:53] tariffs in 2026 one-third this is the wealth controlled by just the top one percent of american [1:50:00] households so the american people do remember a year ago when this president did promise to end inflation [1:50:08] on day one imagine how ridiculous that was he promised energy and electricity prices would be slashed [1:50:13] this is not hyperbole go pull back the tape and we can see what he said he insisted that housing prices [1:50:20] would decrease he said that he would make america affordable again and he said the cost of groceries [1:50:25] would go down on day one but instead it's harder to afford a down payment purchase health insurance [1:50:31] take your family on vacation put food on the table or buy back the school supplies this is the reality [1:50:38] for the average american americans should know uh that this isn't coincidental they understand it [1:50:44] it's because of the chaos cruelty and corruption that they have seen with their own eyes the trump [1:50:48] tariffs continue to make groceries and other goods more expensive for business and for families and [1:50:53] last summer despite rising prices republicans rubber stamped trump's cruel and callous bill [1:51:00] that ripped health care and food assistance away from millions of americans and this failed war of [1:51:06] choice in iran has sown more economic chaos it has raised gas and fertilizer prices and if you look [1:51:13] beyond the chaos and the cruelty you also can see in plain sight the blatant corruption the trump family [1:51:20] has made over 1.4 billion dollars from crypto schemes often leaving regular american investors with losses [1:51:28] a trump family business is on the fast track now to become a bank saddling everyday americans and [1:51:34] community banks with more risks and fraudsters and scammers continue receiving presidential pardons [1:51:41] because they are friends of this president the loot i have to tell you the smashing grab that's happened [1:51:47] with this administration means the loot is literally hanging out of their pocket and they're betting that [1:51:52] americans won't pay attention but while this administration continues to fail we're working to [1:51:57] make bipartisan progress i'm so proud to be on this banking committee i want to thank our chair [1:52:02] and ranking member for the tremendous work that they have done on the road to housing act which the senate [1:52:09] passed last night what a miracle it was to see it passed by such a large margin in the road to housing [1:52:15] act is proof that congress really can rise to the occasion and do what's right and i am particularly [1:52:21] proud of provisions that i champion which will make it easier for banks to invest in affordable housing [1:52:26] and create a federal grant program for people to make essential repairs to their homes so they're not [1:52:31] forced to sell or to foreclose while families are priced out of home ownership and the dream of a [1:52:37] stable house is slipping away congress took a big step forward to expand the housing supply reduce red [1:52:43] tape and make home ownership more affordable now this is worth celebrating our kids deserve it they [1:52:49] deserve it my 21 year old daughter who's so different than her grandparents my parents married at 21 and 22 [1:52:55] and within five years of their marriage they could buy a modest home the average age of a first-time [1:53:01] home buyer is 40 years old so congress should continue to step up and while this administration's [1:53:07] chaos cruelty and corruption is occurring at every juncture i will never hesitate along with my [1:53:13] colleagues who are willing to roll up our sleeves and to work in a bipartisan fashion to address our [1:53:18] shared goals thank you senator you're done yes you gave me an extra minute i didn't even need it but [1:53:31] thank you so much sounds good well let me just say for senators who wish to submit questions for the [1:53:38] hearing record those questions are due one week from today tuesday june 30th witnesses have 45 days [1:53:44] from that day with answers i will say that this has been frankly i think a constructive hearing not [1:53:51] always positive but always constructive however as it relates to the the regular member and i looked up [1:53:59] the price of eggs so that we would be on the same page literally the price of eggs go from about [1:54:05] a dollar 79 at wegmans in my neck of the woods which i didn't have to look up because in south carolina [1:54:12] you can get eggs for about three bucks a dozen uh elizabeth uh ranking member did find some for as high [1:54:20] as nine dollars for eggs i will simply say that the uh ability to compare prices from the trump [1:54:27] administration to the bide administration i'll take that comparison even now almost any day of any week [1:54:35] on any topic the fact of the matter is that uh senator warnock and i had a conversation about having a [1:54:41] matthew 25 hearing at the banking committee which i actually look forward to it because if you start [1:54:46] and read the entire chapter it does give you some responsibility for those who have talent to do good [1:54:50] things with that talent from one two and five uh it also goes into bridesmaids and lots of other [1:54:56] conversations but it does get to the place where we are asking ourselves really important questions about [1:55:00] how we treat each other really important i'm not sure that we always remember that when we're having [1:55:05] a conversation with others but i think it's incredibly important for us to recognize the [1:55:09] importance of loving your enemies and praying for those who persecute you at the same time taking a [1:55:13] look at those who are struggling there are multiple ways to try to address the issue i think both sides [1:55:18] try to do so sometimes i i became republican as a guy who grew up in poverty in a single parent household [1:55:24] because after taking a serious look at the consequences of good policy and bad policies [1:55:29] not good intentions and bad intentions i decided the best way for me to impact communities that [1:55:34] were struggling was by being republican however on this committee we should continue to have the [1:55:39] type of engagement that allows the public to see disagreement without being disagreeable and [1:55:44] ultimately i think that we achieved that goal today however i do look forward to the opportunity to [1:55:49] have a discussion about matthew 25 sometime in the near future hearing adjourned thank you