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[Senate Hearing 114-162]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-162

  NOMINATIONS OF: ADEWALE O. ADEYEMO, AMIAS MOORE GERETY, AND JAY N. 
                                 LERNER

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                                   ON

                            NOMINATIONS OF:

   Adewale O. Adeyemo, of California, to be Assistant Secretary for 
   International Markets and Development, Department of the Treasury

                               __________

   Amias Moore Gerety, of Connecticut, to be Assistant Secretary for 
           Financial Institutions, Department of the Treasury

                               __________

 Jay N. Lerner, of Illinois, to be Inspector General, Federal Deposit 
                         Insurance Corporation

                               __________

                           SEPTEMBER 29, 2015

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                 Available at: http: //www.fdsys.gov/
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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  RICHARD C. SHELBY, Alabama, Chairman

MIKE CRAPO, Idaho                    SHERROD BROWN, Ohio
BOB CORKER, Tennessee                JACK REED, Rhode Island
DAVID VITTER, Louisiana              CHARLES E. SCHUMER, New York
PATRICK J. TOOMEY, Pennsylvania      ROBERT MENENDEZ, New Jersey
MARK KIRK, Illinois                  JON TESTER, Montana
DEAN HELLER, Nevada                  MARK R. WARNER, Virginia
TIM SCOTT, South Carolina            JEFF MERKLEY, Oregon
BEN SASSE, Nebraska                  ELIZABETH WARREN, Massachusetts
TOM COTTON, Arkansas                 HEIDI HEITKAMP, North Dakota
MIKE ROUNDS, South Dakota            JOE DONNELLY, Indiana
JERRY MORAN, Kansas

           William D. Duhnke III, Staff Director and Counsel
                 Mark Powden, Democratic Staff Director
                   Dana Wade, Deputy Staff Director
    John V. O'Hara, Senior Counsel for Illicit Finance and National 
                           Security Policy
                  Jay Dunn, Professional Staff Member
                Shelby Begany, Professional Staff Member
            Laura Swanson, Democratic Deputy Staff Director
               Colin McGinnis, Democratic Policy Director
                       Dawn Ratliff, Chief Clerk
                      Troy Cornell, Hearing Clerk
                      Shelvin Simmons, IT Director
                          Jim Crowell, Editor

                                  (ii)

                            C O N T E N T S

                              ----------                              

                      TUESDAY, SEPTEMBER 29, 2015

                                                                   Page

Opening statement of Chairman Shelby.............................     1

Opening statements, comments, or prepared statements of:
    Senator Brown................................................     2

                                NOMINEES

Adewale O. Adeyemo, of California, to be Assistant Secretary for 
  International Markets and Development, Department of the 
  Treasury.......................................................     4
    Prepared statement...........................................    17
    Biographical sketch of nominee...............................    19
    Responses to written questions of:
        Senator Menendez.........................................    40
Amias Moore Gerety, of Connecticut, to be Assistant Secretary for 
  Financial Institutions, Department of the Treasury.............     5
    Prepared statement...........................................    24
    Biographical sketch of nominee...............................    25
    Responses to written questions of:
        Senator Menendez.........................................    44
Jay N. Lerner, of Illinois, to be Inspector General, Federal 
  Deposit Insurance Corporation..................................     7
    Prepared statement...........................................    32
    Biographical sketch of nominee...............................    33
    Responses to written questions of:
        Senator Brown............................................    47

                                 (iii)
 
                            NOMINATIONS OF:

                   ADEWALE O. ADEYEMO, OF CALIFORNIA,

  TO BE ASSISTANT SECRETARY FOR INTERNATIONAL MARKETS AND DEVELOPMENT,

                      DEPARTMENT OF THE TREASURY;

                  AMIAS MOORE GERETY, OF CONNECTICUT,

         TO BE ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS,

                      DEPARTMENT OF THE TREASURY;

                      JAY N. LERNER, OF ILLINOIS,

                        TO BE INSPECTOR GENERAL,

                 FEDERAL DEPOSIT INSURANCE CORPORATION

                              ----------                              

                      TUESDAY, SEPTEMBER 29, 2015

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10 a.m., in room SD-538, Dirksen 
Senate Office Building, Hon. Richard Shelby, Chairman of the 
Committee, presiding.

        OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY

    Chairman Shelby. The Committee will come to order. This 
morning we will hear testimony on several nominations.
    Mr. Adeyemo--is that correct?
    Mr. Adeyemo. Yes, sir.
    Chairman Shelby. OK.----is nominated to be Assistant 
Secretary of the Treasury for International Markets and 
Development, which is primarily a national security position. 
He has served as Deputy Chief of Staff of the Treasury 
Department since 2012. He was also the Chief of Staff at the 
Consumer Financial Protection Bureau for 16 months in 2010 and 
2011.
    As the Assistant Secretary, he would directly oversee the 
process by which foreign persons seek approval to purchase 
controlling interests in U.S. businesses with national security 
implications. In this position, he would also support the 
management of Treasury's portfolio on international financial 
services, regulation, trade, banking and securities, 
development, and technical assistance.
    Mr. Amias Gerety is nominated to be Assistant Secretary of 
the Treasury for Financial Institutions. Mr. Gerety has been 
working in the Treasury Department since January of 2009. He 
has recently served as the Deputy Assistant Secretary for the 
Financial Stability Oversight Council and is currently serving 
as the Acting Assistant Secretary for Financial Institutions.
    If confirmed, he will be responsible for managing 
Treasury's efforts regarding regulations and legislation 
affecting financial institutions including systemic risk 
designations. He will also be responsible, among other things, 
for coordinating Treasury's initiatives on financial education 
policy as well as overseeing the Terrorism Risk Insurance 
Program and the Community Development Financial Institutions 
Fund.
    The Committee will also consider the nomination of Mr. Jay 
Lerner for Inspector General of the Federal Deposit Insurance 
Corporation. Mr. Lerner has extensive experience in law 
enforcement at the Department of Justice as well as in other 
Government oversight and supervisory roles.
    The Committee looks forward to receiving testimony from the 
nominees today and their responses to our questions.
    Senator Brown.

               STATEMENT OF SENATOR SHERROD BROWN

    Senator Brown. Thank you, Chairman Shelby, for holding 
today's nomination hearing. Congratulations to the three of 
you. I am hopeful that as we do this hearing and learn more 
about you, the confirmation can be affirmative and speedy if 
you earn it, as I think you will.
    Last week, we held a hearing on Adam Szubin's nomination 
for a key counterterrorism post in the Treasury Department. It 
was the Committee's first nomination hearing of this Congress. 
I am pleased we have three nominations today before the 
Committee. It has been a long time coming. Mr. Lerner and Mr. 
Adeyemo were first nominated last year. Mr. Gerety was 
nominated in February. Before I discuss their outstanding 
qualifications, I want to express my hope that the Committee 
will make progress in our nominations backlog. We have seven 
nominees who have yet to receive a hearing. Not one nominee has 
received a vote from this Committee in this entire Congress. 
They all deserve full, fair, and prompt consideration.
    On Thursday, the Committee will hold an executive session 
to mark up oil exports legislation. I have expressed my 
interest and hope that we use that opportunity to act on Mr. 
Szubin's nomination. It was clear at that hearing last week 
that he has this Committee's support.
    That said, we have a distinguished panel of public servants 
before us today.
    Mr. Adeyemo has been nominated to be Assistant Secretary 
for International Markets and Development at the Department of 
Treasury. The position he has been nominated for is responsible 
for leading Treasury's efforts related to CFIUS as well as 
international financial service regulation, trade, development, 
technical assistance, and climate finance. After the financial 
crisis and as economies around the world continue to recover, 
it is essential that Treasury engage with their international 
counterparts to implement strong financial services regulation, 
fair trade, and foreign investment that protects our national 
interest. I look forward to hearing about your priorities in 
this role.
    Mr. Gerety has been nominated to be Assistant Secretary for 
Financial Institutions at Treasury. The Assistant Secretary is 
responsible for developing and coordinating the Treasury's 
policies regarding financial institution legislation and 
regulation that affect financial institutions, Federal agencies 
that regulate or insure financial institutions and securities 
markets. As we continue to implement and enforce Wall Street 
reform, this position is key to ensuring that strong 
regulations promote financial stability and safety and 
soundness and robust consumer protections. I think, too, Mr. 
Gerety, as this moves forward, keep in mind what the chief 
financial services lobbyists in this town said right after the 
President of the United States signed Dodd-Frank. He said, ``It 
is halftime.'' So it is clear that some interests in this town 
seem oblivious that there was a financial crisis. They seem to 
suffer from amnesia, some of them Members of Congress, many of 
them lobbyists, and the move by many of them will be to delay 
and dilute and weaken these rules. And all of you should have 
that at the back of your mind as you do this job.
    Mr. Gerety played an important role since the beginning of 
the current Administration to help our country recover from the 
worst financial crisis since the Depression. I believe he will 
continue that superb work, Mr. Chairman, if we confirm him for 
this position.
    Mr. Lerner has been nominated to be the Inspector General 
at FDIC. That job heads an independent division within the 
agency that conducts audits and investigations and reviews of 
FDIC programs and operations. The IG is required by law to 
provide written reports to the FDIC on why failed institutions 
resulted in a material loss to the Insurance Fund and to make 
recommendations for preventing additional losses in the future. 
It is a vital task in understanding both what causes bank 
failures and how to prevent bank crises.
    Steve Linick, the current IG at the Department of State, a 
frequent witness for this Committee, during his tenure at the 
Federal Housing Finance Agency's Inspector General wrote that 
Mr. Lerner ``not only has a strong background in combating 
waste, fraud, and abuse, which is critical for an Inspector 
General, but also understands the world of banking and 
financial regulation.'' I look forward to hearing your 
testimony today, too.
    Congratulations to the three of you.
    Mr. Chairman, we are all grateful that this Committee is 
beginning to move on nominations.
    Chairman Shelby. Thank you.
    Will all three of you stand and raise your right hand? Do 
you swear or affirm that the testimony that you are about to 
give is the truth, the whole truth, and nothing but the truth, 
so help you God?
    Mr. Adeyemo. I do.
    Mr. Gerety. I do.
    Mr. Lerner. I do.
    Chairman Shelby. Do you agree to appear and testify before 
any duly constituted committee of the U.S. Senate?
    Mr. Adeyemo. Yes.
    Mr. Gerety. Yes.
    Mr. Lerner. Yes.
    Chairman Shelby. Do you have any family members, any of 
you--we will start with you, sir--that you want to introduce 
who are here today?
    Mr. Adeyemo. I do not at this time, Senator.
    Chairman Shelby. OK. Do you, sir?
    Mr. Gerety. Thank you. I want to thank my family and 
friends for being here: my three children, Susie, Pierce, and 
Jenny; my wife, Margaret; my mom, Adelia; and my brother, 
Rowan, and my sister-in-law, Clara. Thank you all for being 
here.
    Chairman Shelby. Do you have some?
    Mr. Lerner. I would like to introduce my supporting and 
loving girlfriend, Libby Stern, behind me. Thank you.
    Chairman Shelby. Thank you.
    Sir, we will start with you. Your written testimony will be 
made part of the record in its entirety. You proceed as you 
wish.

STATEMENT OF ADEWALE O. ADEYEMO, OF CALIFORNIA, TO BE ASSISTANT 
SECRETARY FOR INTERNATIONAL MARKETS AND DEVELOPMENT, DEPARTMENT 
                        OF THE TREASURY

    Mr. Adeyemo. Thank you, Mr. Chairman.
    Chairman Shelby, Ranking Member Brown, and distinguished 
Members of this Committee, thank you for giving me an 
opportunity to be here today. It is a privilege to be the 
President's nominee to serve as the Assistant Secretary for 
International Markets and Development. I am grateful to 
Secretary Lew for his support of my nomination and his 
confidence in my ability to serve our country in this role.
    While they could not be here today, I want to acknowledge 
my father and mother who immigrated to this country in search 
of the American dream and the opportunity to give my brother, 
sister, and me a better life. They have worked hard, as an 
elementary school principal and a nurse, to give opportunities 
to their children, but along the way they have instilled in us 
the values that guide us every day. They often remind us that 
this country affords the chance to do anything we want if we 
work hard. And they have taught us that we have a 
responsibility to serve the community and the country that has 
afforded them so many opportunities.
    This desire to instill the value of service in me led my 
father to wake me early on the morning of February 11, 1990, to 
watch as Nelson Mandela was released from prison. Although the 
images on my television were of a reality thousands of miles 
from my home in California, I could feel the hope Mandela 
inspired not only in South Africans but also in my father. 
Watching Nelson Mandela go from prisoner to president and start 
the process of bringing together a country was more than 
inspirational; it motivated me to imagine how I could use 
public service to improve the world around me. And it continues 
to remind me that events far from home can make a meaningful 
difference in the lives of Americans.
    Serving in Government is in many ways the fulfillment of my 
childhood dream. I joined the Treasury Department in the midst 
of the greatest economic downturn since the Great Depression. I 
worked alongside policymakers charged with coordinating the 
international response to the global recession. The policies 
the United States advocated internationally played a pivotal 
role in breaking the back of the global recession and restoring 
economic growth at home and abroad.
    In 2010, I was given the opportunity to help implement a 
part of the Wall Street Reform and Consumer Protection Act. I 
had the honor and privilege of working for Senator Warren as 
the first Chief of Staff of the Consumer Financial Protection 
Bureau. Helping to build an agency devoted to protecting 
consumers was deeply personal for me. I grew up in the Inland 
Empire, a region of Southern California where, in 2010, one in 
every 14 homes faced foreclosure. These were not just numbers 
to me; they were my friends and my family. I know the impact 
that a lost job, cut in hours, or a bad financial decision can 
have on the ability to stay in the home your children grew up 
in. I am grateful to have played a role in standing up an 
agency that helps consumers better understand and deal with 
their financial choices.
    Before and after my time at CFPB, I have worked on a 
variety of international economic issues, including our trade 
and investment policy agenda, the Committee on Foreign 
Investment in the United States, and our engagement with the 
multilateral development banks. I have represented the United 
States in bilateral and multilateral settings, and no matter 
the destination there is always admiration for the strength and 
resilience of the American economy. Our recovery from the Great 
Recession is no accident. It is the direct result of the 
determination and persistence of the American people and the 
policy choices we have made.
    However, we have more work to do. We still face a number of 
economic challenges, and we also have opportunities. Our 
decisions in the coming years will determine our ability to 
meet the future needs of the American people, like my neighbors 
in California and the families across this country. As the 
global economy becomes more complex and interconnected, the 
policy choices we make now will have an impact on our ability 
to advance our economic and strategic interests in the future. 
While a great deal of the work in International Affairs at the 
Treasury Department is mitigating risks, in a number of areas 
we have an opportunity to advance our economic agenda. If 
confirmed as the Assistant Secretary for International Markets 
and Development, I plan to do just that, by working to level 
the international playing field for American workers and firms, 
protecting our national security, and advancing our development 
agenda.
    It would be my privilege to work with this Committee to 
advance America's economic interests at home and abroad.
    Thank you for taking the time to consider my nomination. I 
am happy to take your questions.
    Chairman Shelby. Thank you.
    Mr. Gerety.

    STATEMENT OF AMIAS MOORE GERETY, OF CONNECTICUT, TO BE 
 ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS, DEPARTMENT OF 
                          THE TREASURY

    Mr. Gerety. Chairman Shelby, Ranking Member Brown, and 
distinguished Members of the Committee, thank you for inviting 
me to testify today. It is an incredible honor to be nominated 
to serve as the Assistant Secretary for Financial Institutions 
and to be here today before this Committee.
    I want to thank President Obama for nominating me and 
Secretary Lew for entrusting me with this opportunity. I have 
learned so much from my colleagues at the Treasury Department, 
and I am committed to continuing to earn the trust that they 
have put in me if I am fortunate enough to be confirmed for 
this position.
    I believe that public service can make a meaningful 
difference in the lives of our fellow Americans. I was raised 
in a family that held service as both a calling and a career. 
My paternal grandfather served as a senior official in the 
Eisenhower administration at the Civil Service Commission and 
at the State Department, where he assisted refugees fleeing 
Communist regimes in Eastern Europe. My maternal grandfather 
served as a parish priest in Jersey City before becoming an 
Episcopal bishop in Washington and New York. Their examples of 
public leadership have guided me from a young age.
    During the 6 \1/2\ years I have been at Treasury, I have 
had the tremendous opportunity to work with you and your 
staffs, with others in Congress, with the private sector, 
independent regulators, and other important stakeholders. We 
have been able to collaborate to pursue policies that support 
the economic and financial well-being of homeowners and small 
businesses, and support firms whose lending powers economic 
growth and the savers who invest in these firms. I have been 
inspired by entrepreneurs who need credit to expand and thrive 
and by local leaders who are transforming communities in 
partnership with Federal lending programs.
    Over the course of my private sector career, I have helped 
companies both large and small as they interact with the 
financial system and seek support to grow and expand. These 
experiences range from a T-shirt company improving its 
efficiency ahead of an initial public offering or helping an 
insurance company manage and build relationships with 
independent agents and brokers. Each experience has given me a 
perspective on how a stable and effective financial system 
supports economic growth and expands economic opportunity 
across the country.
    In Government, I have also seen firsthand the challenges 
and limits of Federal response, when economic confidence is 
shaken, households have been ill-protected, and the financial 
system is not able to support economic growth. If confirmed, I 
will work to safeguard our financial system and confront 
financial and economic threats, whether from malicious cyber 
activity or from panic in financial markets. I have learned the 
importance of coordination and open dialogue as we work to 
reform our financial system, and I am committed to continuing 
this critical collaboration.
    As memories of the most searing financial crisis in 
generations begin to recede, I look forward to engaging with 
this Committee and Congress to move forward on pressing 
national priorities: working to make sure that our financial 
system is both stable and supportive of economic growth; 
expanding access to credit for small businesses and low-income 
communities; and building on our experience so that financial 
services act as a ladder of opportunity toward economic and 
financial security.
    Thank you again for your time, and I look forward to 
answering your questions.
    Chairman Shelby. Thank you.
    Mr. Lerner.

   STATEMENT OF JAY N. LERNER, OF ILLINOIS, TO BE INSPECTOR 
         GENERAL, FEDERAL DEPOSIT INSURANCE CORPORATION

    Mr. Lerner. Thank you, Chairman Shelby, Ranking Member 
Brown, and Members of this Committee. It is truly an honor to 
appear before you today as the nominee to serve as the next 
Inspector General at the Federal Deposit Insurance Corporation.
    At the outset, I would like to recognize and thank my kind 
and caring family, friends, and colleagues for their support. 
In particular, I would like to acknowledge the contributions of 
my parents, as I am blessed for the opportunities that they 
have afforded me and the qualities they have instilled in me: 
honesty, integrity, perseverance, responsibility, and hard 
work. I am also grateful to my supportive girlfriend and my 
three wonderful sisters and their families. My eight nieces and 
nephews have kept me grounded and act as reminders of the 
importance of what we do here today--public service.
    The FDIC plays a critical role in maintaining the stability 
of our financial system and protects the savings of millions of 
hard-working Americans. It insures more than $6 trillion in 
deposits at approximately 6,300 financial institutions and 
directly examines and supervises more than 4,000 of those 
institutions. In addition, the FDIC plays an important role in 
consumer financial protection, resolution and receivership of 
insolvent institutions, and management of significant assets in 
the Deposit Insurance Fund.
    The FDIC Inspector General conducts audits and evaluations 
which make recommendations for improving the FDIC's operations, 
as well as investigations which preserve the integrity of the 
system and protect the savings of bank customers, families, and 
businesses. In this time of pressing need to improve efficiency 
and effectiveness at Government agencies and to eliminate 
waste, the position of the FDIC Inspector General is an 
extremely important one.
    I believe that I am particularly well suited to serve as 
the Inspector General at the FDIC. I have substantial 
leadership and management experience, and I have conducted 
oversight and handled complex banking and financial matters. I 
trained as an accountant and passed the Certified Public 
Accountant examination, and I am an experienced lawyer and 
prosecutor as well. I am confident that this background has 
prepared me well to be successful as an Inspector General, if I 
am confirmed.
    I have worked in public service for more than 23 years, and 
it has been a privilege to serve this country. Currently, I am 
the Chief of Staff and Senior Counsel at the Department of 
Justice Office of the Inspector General, and I have worked in 
the IG community since early 2011. I have seen firsthand the 
many challenges an Inspector General faces and have learned how 
to run a strong IG office that can achieve results. I have also 
gained considerable leadership and management experience under 
the guidance of the current Inspector General, Michael 
Horowitz, as well as other leaders in the office and in the IG 
community. During my tenure, I have been the congressional 
liaison and have worked with the Justice Department's 
leadership, so I can appreciate the importance of an IG's 
unique reporting responsibilities to keep both Congress and the 
agency head fully informed.
    Importantly, I understand the critical role that 
independence plays in the Inspector General's mission. The core 
principles of integrity, objectivity, fairness, and 
accountability must guide an IG's judgment and decisionmaking. 
These are essential attributes to maintain the public's 
confidence in the work of the office. If confirmed, I intend to 
oversee an office that conducts audits and evaluations in a 
thorough and comprehensive manner; pursues investigations 
aggressively and follows the facts wherever they may lead; 
issues fair-minded and impartial reports; and makes 
recommendations to improve the agency's programs.
    Prior to my current position with the Department of Justice 
OIG, I gained extensive experience working on banking and 
financial matters and am, therefore, familiar with how banks 
operate and their relationships with regulators. I served as 
Assistant Chief in the DOJ's Fraud Section, where I worked on 
enforcement initiatives against financial crimes. I prosecuted 
banking and money-laundering cases while in the Money 
Laundering Section at DOJ, and I worked at two law firms on 
similar financial matters. Much of my professional career has 
focused on conducting effective oversight and ensuring 
accountability, and this background will form a strong 
foundation to be a successful Inspector General.
    In closing, I understand the challenges ahead and look 
forward to the opportunity to serve the American people in this 
new role. I would like to thank the Committee for consideration 
of my nomination, and I look forward to continuing to work with 
you and your staffs, if I am confirmed.
    I would be pleased to respond to any questions that you 
might have. Thank you.
    Chairman Shelby. Thank you.
    Mr. Gerety, you have been the Acting Assistant Secretary 
for Financial Institutions since March. Prior to that, you were 
the Deputy Assistant Secretary for the FSOC. This Committee has 
put forward legislation--that you are familiar with--that would 
bring accountability and transparency to FSOC's designation 
process for so-called systemically important firms. If 
confirmed, would you commit to working with Congress to improve 
the designation process based on existing concerns?
    Mr. Gerety. Thank you, Mr. Chairman. I appreciate the 
opportunity to be here today. In my role as Assistant 
Secretary, if confirmed, for Financial Institutions, I would 
not have direct oversight of the Financial Stability Oversight 
Council work. Nonetheless, I think what the Council has 
demonstrated in its years is its ability to work with Congress 
to understand those concerns and to modify its procedures over 
time to increase transparency and clarity.
    I think most recently the Council took steps this past year 
to make a series of changes that give people earlier 
information, more public transparency, and also a better 
opportunity to understand the process after designation. So I 
think those concerns are ones that the Council staff have 
listened closely to, and I would be glad to continue working 
with Congress to understand those concerns.
    Chairman Shelby. Thank you.
    Mr. Adeyemo--I am getting close maybe.
    Mr. Adeyemo. You are getting it.
    [Laughter.]
    Chairman Shelby. The business of insurance in the United 
States is currently regulated by the States, as you know. 
Congress codified that approach in the McCarran-Ferguson Act of 
1945, more than half a century ago. Nonetheless, the Financial 
Stability Board, FSB, is now issuing directives on insurance 
even though it is neither a State nor a U.S. Federal regulator.
    Does Treasury develop consensus positions with the U.S. 
State insurance regulators for FSB advocacy on insurance 
issues? If not, do you believe that it should?
    Mr. Adeyemo. Thank you for having me here, Mr. Chairman. We 
work very closely with the 50 State regulators and the six 
regulators who represent jurisdictions to develop a U.S. 
position on these issues, and I think that we also consult and 
actively speak with industry about their position on these 
issues as we work within the FSB and other international 
organizations.
    We also consult with and work actively with Congress, and 
if confirmed for this job, I look forward to working with you 
and your staff and the Members of this Committee as we develop 
America's position in those institutions.
    Chairman Shelby. Mr. Lerner, there have been many press 
reports of the Department of Justice's Operation Choke Point, 
an effort by the Administration to choke off legal businesses 
the Administration finds objectionable by denying them access 
to financial services. In your current position, did you ever 
recommend opening an investigation into Operation Choke Point?
    Mr. Lerner. Thank you, Mr. Chairman. I am glad you raised 
that issue. Operation Choke Point raises some very serious 
allegations and some very serious concerns. We were following 
the media and press reports at the Department of Justice Office 
of the Inspector General, and we received an inquiry from 
congressional staff, a call, in the summer of 2014. At that 
time, we were not investigating the matter, and the matter 
appeared to be mostly attorney misconduct and allegations of 
attorney misconduct. Operation Choke Point, as you know, was 
run by attorneys, and Section 8E of the IG Act prohibits the 
IG's Office from looking into allegations of attorney 
misconduct. Those allegations go to the Office of Professional 
Responsibility. They have exclusive jurisdiction over those 
matters. The IG's Office has argued against it and advocated 
repeal of the Section 8E provision. But that is the law, and we 
have tried to comply with the law. So we have not----
    Chairman Shelby. What is the law again?
    Mr. Lerner. It is Section 8E of the IG Act.
    Chairman Shelby. And what does it say?
    Mr. Lerner. It basically says that the Office of 
Professional Responsibility, another office in DOJ, has 
exclusive jurisdiction over those matters. There is a pending 
legislative bill that would repeal that provision, and the IG's 
Office has argued to repeal that provision for many, many 
years.
    Chairman Shelby. Do you agree with the Department of 
Justice approach in Operation Choke Point; in other words, you 
are going after--withholding financial support for businesses 
that are legal, nothing illegal?
    Mr. Lerner. As I said, I think it raises some very serious 
questions in terms of prosecution strategies, legal 
interpretations under the FIRREA law. OPR looked at that issue 
and issued its report in July.
    Chairman Shelby. If you are confirmed, how would you use 
your position, if you could, to ensure that the Federal Deposit 
Insurance Corporation does not pressure banks to cut ties with 
legal businesses?
    Mr. Lerner. Thank you. That is a very important question 
and a high priority for me, if I am confirmed for this 
position. As you know, the FDIC OIG issued its report about 2 
weeks ago and raised some serious questions that will require 
follow-up, including the recommendations, which is part of its 
normal follow-up procedures, as to how those communications are 
made to banks and how the communications are made from the 
headquarters of the FDIC to its regional directors. There is 
also an ongoing investigation in terms of the refund-
anticipated loans that were identified in that report. I intend 
to ask a lot of very difficult questions and to continue those 
investigations and get to the bottom of it. It is a high 
priority for me as an IG.
    Chairman Shelby. Sir, I will come back to you. The 
Committee on Foreign Investment's review process is mandated by 
the Foreign Investment National Security Act to preserve a 
necessary line between uninhibited foreign investment and the 
protection of U.S. national security. In your opinion, where is 
that line, if you can designate it? And if confirmed, how would 
you fulfill that mandate?
    Mr. Adeyemo. Senator, thank you for the question. I think 
that our primary goal, the primary goal of CFIUS, is to protect 
the national security of the United States. As you stated, we 
do have an open investment policy in the United States, but our 
goal is also to make sure that any investment in this country 
is mindful of our paramount national security interest. And our 
goal is always to make sure that we look at the national 
security interest first in terms of does the company that is 
being acquired have contracts with the U.S. Government that are 
essential, or is it a critical infrastructure component. And in 
doing that, the legislation that this Committee designed 
provides us with the flexibility we need to make sure that we 
are able to address those national security concerns either by 
mitigation or, in the very rare circumstance, a block of a 
transaction. I think that over the last few years, as we have 
implemented the law through regulations and through practice, 
we have found the ability to deal with most of the cases during 
review. Some of them have moved to investigation. And when we 
have been in an investigation, we have used mitigation when 
needed to make sure that we are always mindful of national 
security.
    Chairman Shelby. Is national security paramount to 
commercial interests?
    Mr. Adeyemo. In terms of the CFIUS process, it is, yes.
    Chairman Shelby. Thank you.
    Another question to you on political interference in FOIA 
inquiries. While serving as a high-ranking official at 
Treasury, you created a new review process for sensitive FOIA 
requests, deviating from prior policy at the Treasury. Such 
requests were reviewed by a special committee including 
yourself and representatives from Public Affairs, Legislative 
Affairs, and the General Counsel's office.
    Do you believe it is appropriate for high-ranking political 
appointees to be involved in the FOIA release process? And if 
so, why?
    Mr. Adeyemo. Thank you for the question, Senator. My 
understanding is that before we created this process, there was 
a review process that was used where various officials 
throughout the Treasury Department reviewed FOIA requests. When 
we arrived at Treasury in 2009, I was charged with working with 
the International Affairs Office, the Office of Terrorism and 
Financial Intelligence, and the Office of the Assistant 
Secretary for Management. The Assistant Secretary for 
Management is charged with working with FOIAs. We had a huge 
FOIA backlog at that point.
    Working with the officials charged with working on the FOIA 
system, we decided to try and create a process to clear the 
backlog and also deal with incoming requests. One of the issues 
with the FOIA process was that we were not getting enough 
people to pay attention to the FOIAs on a regular basis, so we 
set up a bi-monthly meeting, and our goal was to set up a 
process and framework for dealing with the FOIA requests, not 
in any way to interfere with them getting out but, rather, to 
help move them out more quickly.
    I think that when we look at the numbers, what we found was 
that by 2010 we had reduced our backlog dramatically, and over 
the last few years, we have actually released more FOIAs than 
have come into the Treasury Department departmental offices.
    Chairman Shelby. Sir, did you or the review committee ever 
override the advice of a career FOIA officer with respect to 
releases or exemptions? If so, explain.
    I will ask it again. Did you or the review committee ever 
override the advice of a career FOIA officer with respect to 
releases or exemptions?
    Mr. Adeyemo. In the time I participated in the review 
committee, I never overruled a career FOIA official or our 
lawyers in terms of making determinations about the release of 
FOIAs.
    Chairman Shelby. Thank you.
    Senator Brown.
    Senator Brown. Thank you, Mr. Chairman.
    Mr. Gerety, I will start with you. The Independent 
Community Bankers, in endorsing your nomination, Cam Fine 
said--if I could read this--``I can personally attest to his 
intelligence, knowledge of financial policy, and dedication to 
public service. He appreciates the critical role played by 
community banks in our national economy. He has demonstrated 
his willingness to address the ongoing challenge of ``too big 
to fail'' institutions and the threat they pose to our 
financial system and economy.''
    Mr. Gerety, describe how Treasury has worked to ensure that 
regulators tailor regulations for smaller and regional 
institutions as they implement Wall Street reform?
    Mr. Gerety. Thank you. It is a great opportunity for me----
    Senator Brown. And also if you could sort of take that and 
kind of expand in a way to ensure that regulations are not sort 
of one size fits all. So answer that together, if you would.
    Mr. Gerety. Absolutely. I think that one of the very 
significant opportunities that I have had in my time at 
Treasury is to build relationships with the private sector and 
with community bankers--I was meeting yesterday with a group of 
community bankers from the Northeast--and try to take 
opportunities as often as possible to understand the 
perspective that they can offer in terms of the granularity of 
local economies, local businesses, and the local way that 
community banks handle regulation and make sure that they run 
their banks in a safe and sound manner.
    I think certainly when I look at our forward-going 
priorities, we are constantly searching for opportunities to 
make sure that our financial system is diverse and includes a 
very healthy role for thousands of community institutions, both 
banks and credit unions.
    I believe that the Wall Street Reform and Consumer 
Protection Act has a tiered and tailored approach and that in 
implementation we need to continue to build on that approach, 
both in the direct implementation of regulations in the reform 
effort, but also looking back over the course of regulations. I 
am encouraged by the banking regulators' seriousness with which 
they are doing their decennial review, the every-10-year, 
called the ``EGRPRA process.'' And, also, I am struck by the 
fact that often seemingly small things like simplifying a form 
can make a very big difference in terms of the regulatory 
approach and the burden associated with being a community bank. 
So just last week, we saw the banking regulators come together 
and release a proposal to simplify the call report.
    So I think there are opportunities through engagement, 
through understanding the direct experience of community 
bankers all across the country to make sure that our approach 
in designing standards lives up to the principle that the 
toughest standards and the highest scrutiny should be on the 
firms that are the largest, most complex, and pose the most 
risk.
    Senator Brown. Is there a way through FSOC, when sending 
examiners and auditors into, say, regional banks or mid-sized 
or small banks, to sort of collapse their duties into fewer 
numbers of people so that you do not have regulators saying 
different things in different ways and asking for duplicative 
information?
    Mr. Gerety. Thank you, Senator. I think the issue that you 
highlight is an important one because it comes at a difference 
between what you might think of as the standard and what you 
might think of as the actual supervisory or regulatory process. 
And one of the things that I have found interesting when I 
speak with regional bankers, community bankers, and others is 
that they do support higher capital, they do support higher 
liquidity; but they often express concerns about the way those 
standards are implemented or the way those standards are 
approached. And I think our job as policymakers is to work with 
them to understand those concerns and to work with our 
colleagues across Government to try to make sure that the 
standards are forefront and that we can make the process of 
supervision as clear as it can be so the focus is on the 
economic and financial standard for a safe and sound system.
    Senator Brown. Thank you.
    Mr. Adeyemo, the financial crisis obviously made clear how 
interconnected we are, our financial system is, inside the 
world's economies, if you will, and the need for coordination 
when it comes to financial regulation. Share with us the 
importance of engaging with international counterparts to 
strengthen financial regulation, to sort of prevent a race to 
the bottom, to ensure fair trade, to encourage foreign 
investment. Talk through your views about that, if you would.
    Mr. Adeyemo. Thank you for the question, Senator. I 
completely agree that the financial system is more integrated, 
more interconnected, more complex today than it has ever been. 
I think that what we did in this country was that we acted 
quickly and decisively to address some of the financial risks 
that were created prior to the financial crisis.
    Our goal in the International Affairs Office since Congress 
took steps in the Wall Street Reform and Consumer Protection 
Act, was to make sure that other countries met the high 
standard that we have set domestically. We have been working to 
do that through bilateral relationships but also through bodies 
like the FSB to make sure that our firms and our workers not 
only enjoy a level playing field, but that we are protected 
from the risks that exist abroad.
    As you know well, many of our trading partners have large 
financial institutions as well, and the economic problems in 
those countries have an impact on our trading relationships and 
on our economy. Our goal has been to make sure that large firms 
internationally, to help protect ourselves from the risks that 
they pose to our economy as well.
    Senator Brown. Thank you.
    Mr. Lerner, the FDIC Chair announced significant changes to 
the agency's information security governance structure. The 
IG's most recent report, annual report, describes the 
significant progress made in implementing these changes. I know 
of your interest in that. Talk about your priorities as IG. 
Expand on them, if you would, especially in the area of 
cybersecurity.
    Mr. Lerner. Thank you, Senator Brown. As you mentioned, 
cybersecurity is one of my top priorities. I think it is 
critical to the Nation's infrastructure, stabilizing the 
financial system as well as it is a national security issue. In 
fact, I am aware there is another hearing going on before the 
Senate on this issue. I see it as a critical issue to protect 
the savings of hard-working Americans, and I would like to 
explore ways that the IG's Office can participate and 
contribute to that discourse.
    The IG's Office issued a report in March of 2015, just a 
few months ago, which identified a few areas where the IG's 
Office can contribute. In particular, the things are like the 
guidance to the banks, the examination process, making sure 
they have the proper staffing, training, competencies, and 
supervision of the supervisors and the examiners, as well as 
ensuring the safety and security of the cyber systems within 
the FDIC. I see that as a critical, important area, and I would 
like to explore it further.
    Senator Brown. OK. Thank you.
    One more question, Mr. Adeyemo. Do you have any thoughts on 
the CFIUS' handling of the acquisition of Smithfield by the 
Chinese company a couple of years ago maybe? Congress raised 
many concerns. Do you know much about that? Do you have any 
thoughts on how CFIUS--how it played out?
    Mr. Adeyemo. So, Senator, I do not currently have 
responsibilities for the CFIUS portfolio, and as you know, we 
do not comment on cases that are reviewed by CFIUS. What I can 
tell you is that, if confirmed for this role, I look forward to 
reviewing cases with our national security in mind. I think 
that the statute designed by this Committee gives CFIUS the 
flexibility to look at cases that pose a risk to our national 
security and attempt to find ways to mitigate that risk; and if 
we cannot mitigate that risk, to block those transactions. I 
look forward to working with your staff and you to look at ways 
that we can continue to do that in an effective way that 
protects America.
    Senator Brown. Is the statutory balance about right?
    Mr. Adeyemo. I believe that the statute provides us with 
the right level of balance.
    Senator Brown. OK. Thank you.
    Chairman Shelby. Senator Warren.
    Senator Warren. Thank you, Mr. Chairman.
    I want to start by welcoming Wale Adeyemo. Wale and I 
worked closely together when I was helping set up the new 
consumer agency, and as he testified, he was the agency's first 
Chief of Staff. I do not say this lightly. Wale is a miracle 
worker. He works hard. He is smart. He manages people and 
projects with amazing skill, and he understands policy all the 
way down.
    And here is one other thing I want to make sure everybody 
on this Committee knows. Everyone who works with Wale likes 
him, Republicans and Democrats, everyone, Inspectors General, 
Secretary Geithner, Secretary Lew, me. He really is a 
remarkable guy.
    I did not have anything to do with Wale getting this 
nomination. In fact, I am sorry, Wale, I just did not know. I 
did not know until I got the call from the FBI background 
checkers that he had been nominated or was about to be 
nominated. But he is a great choice.
    Wale knows where he came from. He remembers who he grew up 
with, and he tries every day to make this a better country. So 
I hope that everyone on this Committee will support him and 
that he gets an up-or-down vote from the Senate very quickly. 
We are lucky to have him in service. And I want to thank all of 
you for being here today and thank you for your service.
    I just have one question I will focus on in the time I have 
left, and that is a question around systemic risk. Mr. Gerety, 
as you know, in Dodd-Frank Congress directed the Fed to impose 
tougher standards on banks that have more than $50 billion in 
total assets. That covers about 40 of the biggest banks in the 
country, about one-half of 1 percent of the 6,500 banks that we 
have in the United States, but about 95 percent of all the 
banking assets in the United States.
    Now, this tougher scrutiny is designed to focus the 
attention of the regulators on where the risk is--not on 
community banks or credit unions but on the biggest banks that 
can threaten our financial security.
    Of course, among these 40 biggest banks, some are riskier 
than others, and Congress knew that, so it directed the Fed to 
tailor its rules to match the risk that a particular bank 
poses.
    There has been some talk recently about exempting many of 
these banks from the tougher rules that are imposed on banks 
with $50 billion or more, above that threshold, and there is 
talk about increasing the threshold to as much as $500 billion.
    So what I want to ask, Mr. Gerety, is: As Acting Assistant 
Treasury Secretary for Financial Institutions, you have gotten 
a close look at the risks posed by banks of different sizes. 
Based on that experience, do you think it makes sense to exempt 
banks with up to $500 billion in assets from heightened 
standards in Dodd-Frank rather than just directing the Fed to 
tailor the rules appropriately for riskier and somewhat less 
riskier banks?
    Mr. Gerety. Thank you, Senator. I think you raise an 
important principle at the heart of our approach in financial 
supervision, which is that the toughest standards should be 
applied and the highest scrutiny should be applied to the 
largest and most complex financial institutions.
    As the Secretary has said, raising the number that high 
raises significant concerns. It would leave only a handful of 
firms subject to the statutory enhanced prudential standards 
and raises the risk that firms that we saw in the crisis--
Countrywide, Washington Mutual, Bear Stearns--of course, were 
significantly below that threshold, also demonstrated that they 
could pose risks to the system more broadly.
    I think the central question for us is: How do we make sure 
that the tailoring is appropriate? It is very clear that a $50 
billion institution is different than a $2 trillion institution 
and also that it is different than a $2 billion institution. I 
think that we have seen the Federal Reserve and the banking 
regulators look at ways to design different standards, even 
above $50 billion. But I know that we continue to hear concerns 
from firms, particularly at the lower end of that threshold. 
And I think there is always continued dialogue that would be 
very valuable to make sure that those standards are 
appropriately tailored and that they appropriately capture the 
risk that may exist within a range of financial institutions in 
our country.
    Senator Warren. All right. Thank you very much, Mr. Gerety. 
To me, this is an easy decision. We can raise the threshold and 
cut loose half or more of the biggest banks in the country and 
just hope they do not make the same mistakes that they made in 
2008 when they nearly brought down the whole economy and had to 
be bailed out. Or we can play it safe, keep the threshold where 
it is, and rely on the Fed to follow the law and tailor the 
risks--tailor the regulations to the risks that are posed by 
different large financial institutions. You know, since the 
American taxpayers are on the hook when the economy starts to 
implode, I suspect that most of them would prefer that Congress 
play it safe here. Thank you.
    Thank you, Mr. Chairman.
    Chairman Shelby. Senator Brown, do you have another 
question?
    Senator Brown. No. Thank you.
    Chairman Shelby. If there are no other questions, I want to 
thank all the participants here today, and we will try to see 
if we can move your nominations.
    Thank you very much. The Committee is adjourned.
    [Whereupon, at 10:45 a.m., the hearing was adjourned.]
    [Prepared statements, biographical sketches of nominees, 
and responses to written questions supplied for the record 
follow:]
                PREPARED STATEMENT OF ADEWALE O. ADEYEMO
  To Be Assistant Secretary for International Markets and Development,
                       Department of the Treasury
                           September 29, 2015
    Chairman Shelby, Ranking Member Brown, and distinguished Members of 
this Committee, thank you for giving me an opportunity to be here 
today. It is a privilege to be the President's nominee to serve as the 
Assistant Secretary for International Markets and Development. I am 
grateful to Secretary Lew for his support of my nomination and his 
confidence in my ability to serve our country in this role.
    While they could not be here today, I want to acknowledge my father 
and mother who immigrated to this country in search of the American 
dream and the opportunity to give my brother, sister, and me a better 
life. They have worked hard, as an elementary school principal and a 
nurse, to give tremendous opportunities to their children, but along 
the way, they have instilled in us the values that guide us every day. 
They often remind us that this country affords the chance to do 
anything we wanted if we work hard. And they have taught us that we 
have a responsibility to serve the community and the country that has 
afforded them so many opportunities.
    This desire to instill the value of service in me led my father to 
wake me early on the morning of February 11, 1990, to watch as Nelson 
Mandela was released from prison. Although the images on my television 
were of a reality thousands of miles from our home in California, I 
could feel the hope Mandela inspired not only in South Africans but 
also in my father. Watching Nelson Mandela go from prisoner to 
president and start the process of bringing together a country was more 
than inspirational, it motivated me to imagine how I could use public 
service to improve the world around me. And it continues to remind me 
that events far from home can make a meaningful difference in the lives 
of Americans.
    Serving in Government is in many ways the fulfillment of my 
childhood dream. I joined the Treasury Department in the midst of the 
greatest economic downturn since the Great Depression. I worked 
alongside policymakers charged with coordinating the international 
response to the global recession. The policies the United States 
advocated internationally played a pivotal role in breaking the back of 
the global recession and restoring economic growth at home and abroad.
    In 2010, I was given an opportunity to help implement a part of the 
Wall Street Reform and Consumer Protection Act. I had the honor and 
privilege of working for Senator Warren as the first Chief of Staff of 
the Consumer Financial Protection Bureau. Helping to build an agency 
devoted to protecting consumers was deeply personal for me. I grew up 
in the Inland Empire, a region of Southern California, where in 2010, 1 
in every 14 homes faced foreclosure. These were not just numbers to me; 
they were my friends and family. I know the impact that a lost job, cut 
in hours, or one bad financial decision can have on the ability to stay 
in the home your children grew up in. I am grateful to have played a 
role in standing up an agency that helps consumers better understand 
and deal with their financial choices.
    Before and after my time at the Consumer Financial Protection 
Bureau, I have worked on a variety of international economic issues, 
including our trade and investment policy agenda, the Committee on 
Foreign Investment in the United States, and our engagement with the 
multilateral development banks. I have represented the United States in 
bilateral and multilateral settings, and no matter the destination 
there is always admiration for the strength and resilience of the 
American economy. Our recovery from the great recession is no accident. 
It is the direct result of the determination and persistence of the 
American people, and the policy choices we have made.
    However, we have more work to do. We still face a number of 
economic challenges, and we also have tremendous opportunities. Our 
decisions in the coming years will determine our ability to meet the 
future economic needs of the American people, like my neighbors in 
California and families across the country. As the global economy 
becomes more complex and interconnected, the policy choices we make now 
will have an impact on our ability to advance our economic and 
strategic interests in the future. While a great deal of the work we do 
in International Affairs at the Treasury Department is mitigating 
risks, in a number of areas we have opportunities to advance our 
economic agenda. If confirmed as the Assistant Secretary for 
International Markets and Development, I plan to do just that, by 
working to level the international playing field for American workers 
and firms, protecting our national security, and advancing our 
development agenda.
    It would be my privilege to work with this Committee to advance 
America's economic interests at home and abroad.
    Thank you for taking the time to consider my nomination. I am happy 
to take your questions.

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                PREPARED STATEMENT OF AMIAS MOORE GERETY
          To Be Assistant Secretary for Financial Institutions
                       Department of the Treasury
                           September 29, 2015
    Chairman Shelby, Ranking Member Brown, distinguished Members of the 
Committee. Thank you for inviting me to testify today.
    It is an incredible honor to be nominated to serve as Assistant 
Secretary for Financial Institutions and to be here today before this 
Committee.
    I want to recognize the many people who have supported me--family, 
friends, and colleagues. I especially want to thank my wife Margaret 
and our three children Susie, Pierce, and Jenny. Also my parents, 
Adelia and Tom, and my three brothers. And recognize my brother Rowan 
and my sister-in-law Clara, who are here as well. My family's love and 
support has been critical at each step in my career and my 5 years as a 
father have taught me much about both patience and joy.
    I also want to thank President Obama for nominating me and 
Secretary Lew for entrusting me with this opportunity. I have learned 
so much from my colleagues at the Treasury Department, and I am 
committed to continuing to earn the trust that they have put in me if I 
am fortunate enough to be confirmed.
    I believe that public service can make a meaningful difference in 
the lives of our fellow Americans. I was raised in a family that held 
service as both a calling and a career. My paternal grandfather served 
as a senior official in the Eisenhower administration at the Civil 
Service Commission and at the State Department, assisting refugees 
fleeing Communist regimes in Eastern Europe. My maternal grandfather 
served as parish priest in Jersey City before becoming an Episcopal 
Bishop in Washington and New York. Their examples of public leadership 
have guided me from a young age.
    During the six and a half years I have been at Treasury, I have had 
the tremendous opportunity to work with you and your staffs, with 
others in Congress, with the private sector, independent regulators, 
and other important stakeholders. We have been able to collaborate to 
pursue policies that support the economic and financial well-being of 
homeowners and small businesses, and support firms whose lending powers 
economic growth and the savers who invest in those firms. I have been 
inspired by entrepreneurs who need credit to expand and thrive, and by 
local leaders who are transforming communities in partnership with 
Federal lending programs.
    Over the course of my private sector career, I have helped 
companies both large and small interact with the financial system, 
seeking support to grow and expand. These experiences range from 
helping a T-shirt company improve its efficiency in preparation for an 
initial public offering to helping an insurance company build and 
manage relationships with independent agents and brokers. Each has 
given me a perspective on how a stable and effective financial system 
supports economic growth and expands economic opportunity across the 
country.
    In Government, I have also seen first-hand the challenges and 
limits of Federal response, when economic confidence is shaken, 
households have been ill-protected, and the financial system is not 
able to support economic growth. If confirmed, I will work to safeguard 
our financial system, and confront financial and economic threats, 
whether from malicious cyber activity or from panic in financial 
markets. I have learned the importance of coordination and open 
dialogue as we work to reform our financial system, and I am committed 
to continuing this critical collaboration.
    As memories of the most searing financial crisis in generations 
begin to recede, I look forward to engaging with this Committee and 
Congress to move forward on pressing national priorities: working to 
make sure that our financial system is both stable and supportive of 
economic growth; expanding access to credit for small businesses and 
low-income communities; and building on our experience so that 
financial services act as a ladder of opportunity toward economic and 
financial security.
    Thank you again for your time and I look forward to answering your 
questions.

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                  PREPARED STATEMENT OF JAY N. LERNER
     To Be Inspector General, Federal Deposit Insurance Corporation
                           September 29, 2015
    Thank you, Chairman Shelby, Ranking Member Brown, and Members of 
the Committee. It is truly an honor to appear before you today as the 
nominee to serve as the Inspector General (IG) of the Federal Deposit 
Insurance Corporation (FDIC).
    At the outset, I would like to recognize and thank my kind and 
caring family, friends, and colleagues for their support. In 
particular, I would like to acknowledge the contributions of my 
parents, as I am blessed for the opportunities that they have afforded 
me, and the qualities they have instilled in me: honesty, integrity, 
perseverance, responsibility, and hard work. I am also grateful to my 
supportive girlfriend and three wonderful sisters and their families. 
My eight nieces and nephews have kept me grounded and act as reminders 
of the importance of what we do here today--public service.
    The FDIC plays a critical role in maintaining the stability of our 
financial system and protects the savings of millions of hard-working 
Americans. It insures more than $6 trillion in deposits at 
approximately 6,300 financial institutions, and directly examines and 
supervises more than 4,000 of these institutions. In addition, the FDIC 
plays an important role in consumer financial protection, resolution 
and receivership of insolvent institutions, and management of 
significant assets in the deposit insurance fund.
    The FDIC Inspector General conducts audits and evaluations which 
make recommendations for improving the FDIC's operations, as well as 
investigations which preserve the integrity of the system and protect 
the savings of bank customers, families, and businesses. In this time 
of pressing need to improve efficiency and effectiveness at government 
agencies and to eliminate waste, the position of the FDIC Inspector 
General is an extremely important one.
    I believe that I am particularly well-suited to serve as the 
Inspector General at the FDIC. I have substantial leadership and 
management experience, and I have conducted oversight and handled 
complex banking and financial matters. I trained as an accountant and 
passed the Certified Public Accountant Examination, and I am an 
experienced lawyer and prosecutor. I am confident that this background 
has prepared me well to be successful as an Inspector General, if 
confirmed.
    I have worked in public service for more than 23 years, and it has 
been a privilege to serve this country. Currently, I am the Chief of 
Staff and Senior Counsel at the Department of Justice (DOJ) Office of 
the Inspector General (OIG), and I have worked in the IG community 
since early 2011. I have seen first-hand the many challenges an 
Inspector General faces, and have learned how to run a strong IG office 
that can achieve results. I have also gained considerable leadership 
and management experience under the guidance of the current Inspector 
General Michael Horowitz, as well as other leaders in the Office and in 
the IG community. During my tenure, I have been the Congressional 
liaison and have worked with the Justice Department's leadership, so I 
can appreciate the importance of an IG's unique reporting 
responsibilities to keep both Congress and the agency head fully 
informed.
    Importantly, I understand the critical role that independence plays 
in an Inspector General's mission. The core principles of integrity, 
objectivity, fairness, and accountability must guide an IG's judgment 
and decisionmaking. These are essential attributes to maintain the 
public's confidence in the work of the Office. If confirmed, I intend 
to oversee an Office that conducts audits and evaluations in a thorough 
and comprehensive manner; pursues investigations aggressively and 
follows the facts wherever they may lead; issues fair-minded and 
impartial reports; and makes recommendations to improve the agency's 
programs.
    Prior to my current position with the Department of Justice OIG, I 
gained extensive experience working on banking and financial matters, 
and am therefore familiar with how banks operate and their 
relationships with regulators. I served as Assistant Chief in DOJ's 
Fraud Section, where I worked on enforcement initiatives against 
financial crimes. I prosecuted banking and money laundering cases while 
in the Money Laundering Section at DOJ, and I worked at two law firms 
on similar financial matters. Much of my professional career has 
focused on conducting effective oversight and ensuring accountability, 
and this background will form a strong foundation to be a successful 
Inspector General.
    In closing, I understand the challenges ahead and look forward to 
the opportunity to serve the American people in this new role. I would 
like to thank the Committee for consideration of my nomination, and I 
look forward to continuing to work with you and your staffs, if I am 
confirmed. I would be pleased to respond to any questions that you 
might have.

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RESPONSES TO WRITTEN QUESTIONS OF SENATOR MENENDEZ FROM ADEWALE 
                           O. ADEYEMO

Q.1. As Assistant Secretary for International Markets and 
Development at the U.S. Department of the Treasury, you will 
play an integral role in the Committee on Foreign Investment in 
the United States (CFIUS). As you know, CFIUS is tasked with 
reviewing the national security implications of foreign 
investment in U.S. companies. In a day and age in which U.S. 
infrastructure, information technology, and intellectual 
property and innovations are subject to almost constant threat 
of hacking and cyberterrorism, we must be particularly vigilant 
of the acquisition of certain systems and technology by foreign 
firms.

    How you will navigate the competing interests of 
        facilitating essential foreign investment in the United 
        States with the very real threats to our national 
        security?

    Based on your knowledge of the CFIUS review 
        process, under what conditions might a foreign 
        acquisition of a U.S. company constitute a national 
        security threat to the United States?

    From where do you see that threat most likely to 
        emanate today?

      Do you see Iran as a national security threat?

      Do you see Cuba as a national security threat?

A.1. CFIUS is focused on protecting the national security. As 
Assistant Secretary, I would maintain this focus on national 
security, pursuant to which CFIUS clears transactions only when 
the committee has no unresolved national security concerns with 
the transaction. Within this national security mission, CFIUS 
can facilitate foreign investment by, among other things, 
focusing on national security; acting consistent with the 
timeframes provided in statute; using targeted mitigation to 
resolve identified concerns, where mitigation can fully resolve 
such concerns; and making the process accessible, by publishing 
regulations, guidance, annual reports, and having an open door 
for companies interested in learning about the process.
    CFIUS determines whether a transaction poses a national 
security risk by evaluating the threat, vulnerability, and 
consequences posed by a transaction. Applying this analytical 
framework on a case-by-case basis, CFIUS assesses whether the 
transaction under review poses a national security risk. In 
conducting its analysis, CFIUS considers a variety of potential 
national security factors, including the factors listed in the 
CFIUS statute, as appropriate. For example, while investments 
from countries subject to sanctions, such as Iran and Cuba, are 
still limited by law, in reviewing investments from other 
countries, CFIUS considers, among other factors, the adherence 
of the subject country to nonproliferation control regimes, the 
relationship of the country with the United States, its record 
on cooperating in counter-terrorism efforts, and the potential 
for transshipment or diversion of technologies with military 
applications.
    We can, and do, protect the national security while also 
promoting foreign investment. Foreign investment creates good 
jobs, spurs innovation, and results in lower prices and greater 
consumer choice. Accordingly, the executive branch has engaged 
in extensive efforts to encourage foreign investment in the 
United States, such as the Department of Commerce-led SelectUSA 
initiative, and Treasury supports these initiatives, consistent 
with Treasury's mission.

Q.2. Last month, the Departments of Treasury and Commerce 
announced the broadest easing of restrictions to Cuba Sanction 
Regulations we have seen yet. And shortly after, the Department 
of Commerce announced that Secretary Penny Pritzker would 
travel there next month. Opening Cuba for business by easing 
restrictions and legitimizing a totalitarian regime is a lavish 
reward that is earning us nothing in return. I completely 
reject the notion that it is the United States that has created 
hardship on the Cuban people, not the regime itself.
    With regard to the Department of Treasury's recent 
announcement, changes to the Cuban Assets Control Regulations 
were undertaken with little notice to Congress. There was no 
opportunity for the American people to comment on the proposed 
changes, and, I suspect little consideration for the second and 
third order effects of funneling new cash-flows into the Cuban 
regime's coffers. As I've said before, the U.S. policy in Cuba 
should be guided by one, single principle, and that is 
supporting the Cuban people's aspirations for a democratic 
future. This was the intent of the Libertad Act, which I helped 
author. Providing the regime the funds it needs to continue its 
repressive rule is not the way to support a democratic 
transition, and it's not consistent with the intent of the law.
    Despite the Administration easing restrictions on 
everything from travel to telecommunications to banking and 
commercial transactions, the fact remains that the Cuban regime 
controls most of the country's economy, and it is highly 
unlikely that any financial benefits will make their way to the 
Cuban people.

    As Assistant Secretary of International Markets and 
        Development, what role will you play in ensuring that 
        the Administration's easing of these crucial sanctions 
        will not be manipulated by the regime to further 
        disadvantage the Cuban people?

    What do you expect the impact of sanctions relief 
        to be on your work?

    If--in spite of this inappropriately generous 
        easing of sanctions--Cuba continues to act as a 
        ruthless, totalitarian regime without regard for the 
        needs of its people, does the Department of the 
        Treasury plan to reassert restrictions?

    Will the Castro regime face any consequences from 
        the Department of the Treasury if it continues to jail 
        dissidents, silence political opponents and harbor 
        American fugitives?

A.2. Along with the Commerce Department's Bureau of Industry 
and Security, the Department of the Treasury's Office of 
Foreign Assets Control administers and enforces the Cuba 
sanctions program, in consultation with other relevant agencies 
of the U.S. Government, including the Department of State. I 
understand that colleagues at the State Department are engaged 
in multiple lines of negotiations with the Government of Cuba, 
including to address law enforcement cooperation and issues 
such as fugitives. I would refer you to the State Department 
for further details regarding these negotiations.

Q.3. The position of Assistant Secretary of International 
Markets and Development was created by the Foreign Investment 
and National Security Act, the FINSA law, passed by this 
Committee and signed into law in 2007. While foreign investment 
and development is in our economic interests, the foremost 
consideration of the person who holds this position should be 
national security.

    Do you agree with that statement?

    In this position, there may be pressures--pressure by those 
above you to consider political and economic interests about 
national security interests. And with these pressures, you will 
need to work through the CFIUS process, coordinating numerous 
agencies under the fairly strict timelines the law prescribes. 
This can be a difficult balance to strike and a significant 
moral and professional challenge.

    Can you give us an idea of a similar challenge you 
        have had in your career, coordinating, under pressure, 
        multiple agencies with different cultures and 
        viewpoints--and how you responded?

A.3. By statute, the focus of CFIUS is national security. If 
confirmed, I would exercise my responsibilities with respect to 
CFIUS consistent with FINSA.
    In July of 2015, Secretary Lew led the U.S. delegation to 
the United Nations (UN) Third International Conference on 
Financing for Development (FfD) in Addis Ababa, Ethiopia, 
signaling strong U.S. engagement and support for the global 
sustainable development agenda. Both in the lead up to the 
meeting and during the meeting itself, I coordinated 
intensively with multiple agencies as the point person from 
Treasury. This included working closely with colleagues from 
various agencies and the NSC to resolve issues and priorities 
as we prepared for FfD. Negotiations over the FfD outcome 
document required intensive interagency coordination within the 
United States Government as well as coordination with other 
U.N. member states. I responded to the challenges that arose by 
working to identify viable options, helping to develop a 
process for reaching a conclusion, and collaborating with 
colleagues in an attempt to reach consensus. Ultimately, our 
efforts resulted in approval of the Addis Ababa Action Agenda, 
the outcome document for the Financing for Development 
conference. The Action Agenda represented an expansion of the 
development agenda, moving away from an exclusive focus on 
official development assistance toward a more holistic approach 
that includes countries raising their own resources and 
leveraging private sector financing to address development 
challenges.

Q.4. In December 2014, the Administration announced major 
changes in U.S. policy toward Cuba, including the restoration 
of diplomatic relations, a review by the Department of State of 
Cuba's designation as a state sponsor of terrorism, and an 
increase in travel, trade, and the flow of information to Cuba. 
This third step required the Departments of Treasury and 
Commerce to amend sanctions regulations. Treasury implemented 
changes to the Cuban Assets Control Regulations (CACR) on 
January 16, 2015, and again on September 21, 2015.
    On September 21, 2015, the Office of Foreign Assets Control 
published the following in the Federal Register:

        The Department of the Treasury's Office of Foreign Assets 
        Control (OFAC) is amending the Cuban Assets Control Regulations 
        to further implement elements of the policy announced by the 
        President on December 17, 2014, to engage and empower the Cuban 
        people. Among other things, these amendments further facilitate 
        travel to Cuba for authorized purposes (including authorizing 
        by general license the provision of carrier services by 
        vessel), expand the telecommunications and Internet-based 
        services general licenses, authorize certain persons subject to 
        U.S. jurisdiction to establish a physical presence in Cuba, 
        allow certain additional persons subject to U.S. jurisdiction 
        to open and maintain bank accounts in Cuba to use for 
        authorized purposes, allow certain additional financial 
        transactions (including removing the limit on donative 
        remittances to Cuba and unblocking certain previously blocked 
        remittances and funds transfers), authorize all persons subject 
        to U.S. jurisdiction to provide goods and services to Cuban 
        national individuals located outside of Cuba, and allow a 
        number of other activities related to, among other areas, legal 
        services, imports of gifts sent to the United States, and 
        educational activities. These amendments also implement certain 
        technical and conforming changes.

   LDid the Department of the Treasury conduct a legal 
        review of the amendments to the Cuban Assets Control 
        Regulations? What is the process for this legal review? 
        What entity or individual makes the final legal 
        determination that amendments to the Cuban Assets 
        Control Regulations do not violate other legal 
        provisions?

   LUnder what legal authority did the Department of 
        the Treasury make the January 16, 2015 and September 
        21, 2015 changes to the Cuban Assets Control 
        Regulations? Do these changes conflict with any portion 
        of the Cuban Liberty and Democratic Solidarity 
        (LIBERTAD) Act of 1996 (Pub. L. 104-114, 22 U.S.C.  
        6021 et seq.) or other Cuba sanctions laws, including 
        the Cuban Democracy Act of 1992 (Pub. L. 102-484, 22 
        U.S.C.  6001 et seq.), and the Trade Sanctions Reform 
        and Export Enhancement Act of 2000 (Pub. L. 106-387, 22 
        U.S.C.  7201 et seq.)?

   LHow does the Department of the Treasury interpret 
        the legal limits for changes to Cuba sanctions under 
        the Cuban Liberty and Democratic Solidarity (LIBERTAD) 
        Act of 1996 (Pub. L. 104-114, 22 U.S.C.  6021 et seq.) 
        or other Cuba sanctions laws, including the Cuban 
        Democracy Act of 1992 (Pub. L. 102-484, 22 U.S.C.  
        6001 et seq.), and the Trade Sanctions Reform and 
        Export Enhancement Act of 2000 (Pub. L. 106-387, 22 
        U.S.C.  7201 et seq.)?

   LWhat additional actions does the Department of the 
        Treasury feel it can pursue without violating the Cuban 
        Liberty and Democratic Solidarity (LIBERTAD) Act of 
        1996 (Pub. L. 104-114, 22 U.S.C.  6021 et seq.)?

A.4. The Department of the Treasury's Office of Foreign Assets 
Control Office manages the department's policy with respect to 
Cuba sanctions. My understanding is that the Cuban Assets 
Control Regulations (CACR) were originally issued pursuant to 
the Trading With The Enemy Act (TWEA), which affords the 
President and his designees the authority to revise the 
regulations. The President continues to exercise his authority 
to adjust the regulations consistent with and subject to 
limitations in certain statutes subsequently enacted by 
Congress with respect to Cuba, including the Trade Sanctions 
Reform and Export Enhancement Act of 2000 (TSRA), the Cuban 
Democracy Act of 1992 (CDA), and the Libertad Act. My 
understanding is that attorneys in all relevant agencies have 
confirmed that the amendments to the CACR issued by the 
Department of the Treasury's Office of Foreign Assets Control 
are consistent with these existing statutes.
                                ------                                

 RESPONSES TO WRITTEN QUESTIONS OF SENATOR MENENDEZ FROM AMIAS 
                          MOORE GERETY

Q.1. I am deeply concerned that the current economic crisis in 
Puerto Rico threatens to destabilize the island. Together with 
seven of my colleagues, I recently sent a letter to Secretary 
Lew urging the Department of the Treasury to move beyond simply 
providing technical assistance and take an active leadership 
role to immediately resolve this crisis.
    To be clear, this crisis requires assistance from both 
Congress and the Administration. It is essential for Congress 
to approve the pending legislation I introduced with Senators 
Schumer, Blumenthal, and others, which would allow the 
government of Puerto Rico to authorize its public utilities to 
rework their debts under Chapter 9 of the U.S. Bankruptcy Code. 
But taken alone, this action is simply not enough.
    The Department of the Treasury is best suited to take a 
leadership role to bring creditors and debtors to the table to 
resolve this crisis immediately.

   LIn addition to resolution of the island's public 
        debts through Chapter 9 bankruptcy--an option not 
        currently available to Puerto Rico--what other 
        interventions are necessary to solve the economic 
        crisis there?

   LWill the Department commit to bringing creditors 
        and debtors to the table to resolve the outstanding 
        debt issues?

   LWhat specific tools will the Department utilize to 
        resolve this crisis? What steps will it take to 
        intervene, beyond continuing to provide ``technical 
        assistance''?

   LWhat is the timeline for implementing these 
        actions?

A.1. The U.S. Treasury remains committed to finding solutions 
that support the people of Puerto Rico. While I do not work 
directly on those issues, Treasury has a dedicated team that is 
closely monitoring the situation and sharing its expertise with 
the Commonwealth officials who are working to manage through 
these difficult times. However, any meaningful response to 
assist the U.S. citizens living and working in Puerto Rico 
requires Congressional action.
    To that end, the Department believes a central element for 
any Federal response to Puerto Rico's fiscal situation must 
include an orderly legal process built on the tested principles 
of Chapter 9 of the U.S. Bankruptcy Code. Without Congressional 
action, Treasury is deeply concerned that a protracted and 
disorderly restructuring process will cause long-term damage to 
the health, safety, and financial well-being of the families 
living and working in Puerto Rico.
    If you have further questions regarding the Department's 
work on this important and urgent issue, I would be happy to 
ask my colleagues to follow up with you directly.

Q.2. Over the last 6 years, you have worked extensively on 
addressing systemic risk to the financial system. As we saw in 
the financial crisis, sources of risk can build anywhere in the 
financial system, regardless of the types of entities involved 
or the jurisdictional boundaries between regulators. So it's 
crucial to have tools for identifying risks to the financial 
system and properly addressing them.

   LWhat tools have been the most helpful in 
        identifying potential risks and areas of weakness in 
        the financial system?

   LFrom your perspective, 8 years from the start of 
        the financial crisis, what are the greatest unresolved 
        systemic risks to our financial system, and how would 
        you go about addressing these risks?

A.2. One of the critical lessons of the financial crisis is 
that no single entity had responsibility for monitoring the 
overall stability of the financial system. In response, 
Congress created the Financial Stability Oversight Council 
(FSOC), which brings the financial regulatory community 
together with the mission to identify and respond to potential 
threats to financial stability. The FSOC now provides an 
important forum for member agencies with supervisory, 
examination, data, surveillance, and policy expertise, to 
collectively gather and analyze information to assess risks 
that affect financial markets and institutions. The Dodd-Frank 
Act also gave regulators additional authority to impose more 
stringent prudential requirements on the largest, most complex 
financial institutions so that they employ sound risk 
management practices, are more resilient in the face of stress, 
and, if necessary, are able to be safely wound down in an 
orderly manner.
    FSOC continuously monitors for threats to financial 
stability and issues annual reports that highlight emerging 
threats and make related recommendations. The 2015 annual 
report identified 11 key areas, including potential incentives 
for greater risk-taking in a low-yield environment; the need 
for continued progress to reform benchmark rates, such as 
LIBOR; and the continued reliance on short-term wholesale 
funding. I also believe that more work needs to be done to 
improve our financial system's ability to address emerging 
cybersecurity risks, and that we must continue working with our 
international peers to implement reforms necessary to 
facilitate effective cross-border resolutions. If confirmed, I 
will continue to make sure that Treasury is doing all it can to 
monitor these issues and to take action where appropriate.

Q.3. As part of your responsibilities at the Department of the 
Treasury, you will oversee the Community Development Financial 
Institutions (CDFI) Fund. By providing funding and technical 
assistance to local organizations that work to expand the 
availability of credit for families and for small businesses, 
the CDFI Fund plays a critical role in community development 
for some of our most distressed neighborhoods. In my State of 
New Jersey, CDFIs have used funding to build multifamily 
affordable housing and community facilities, offer small 
business and commercial real estate loans, and to increase food 
access and create jobs in low-income communities, in addition 
to many other important community and economic development 
projects. Funding for CDFIs is particularly important, as 
communities throughout the country continue to struggle with 
the longstanding effects of the foreclosure crisis and high 
household debt.

   LAs Assistant Secretary for Financial Institutions, 
        what will you do to ensure that the CDFI Fund has the 
        tools and resources it requires to continuing providing 
        funds and technical assistance to CDFIs throughout the 
        Nation?

A.3. This past year Treasury celebrated the twentieth 
anniversary of the CDFI Fund, a celebration I was proud to take 
part of because of the critical role CDFIs play in supporting 
one of Treasury's core objectives of promoting economic growth 
that is inclusive of all communities and Americans. In the 20 
years since it was created, the CDFI Fund has awarded more than 
$2 billion to CDFIs, allocated $44 billion in tax credit 
authority through the New Markets Tax Credit Program, and has 
guaranteed $857 million in bonds through the CDFI Bond 
Guarantee Program. In many cases CDFIs are the only sources of 
capital for borrowers in the communities they serve.If 
confirmed, I will advocate for keeping the CDFI Fund's programs 
fully and adequately funded, as reflected in the President's 
budget requests. I will stand ready to work with Congress to 
support legislative changes to deepen the impact of existing 
programs, such as changes to the CDFI Bond Guarantee Program to 
enable more CDFIs to participate in the program and more 
communities to benefit from low-cost, long-term community 
development capital. And I will work closely with the Director 
of the CDFI Fund to develop the 5-year strategic plan that 
identifies the key priorities for today and for the CDFI Fund's 
future.

Q.4. The Department of the Treasury plays a crucial role in 
coordinating the Federal financial regulators. As Assistant 
Secretary for Financial Institutions, you will oversee the 
coordination of policies that affect financial institutions of 
varying size, scope, and activity. Of utmost importance in the 
development of these policies is crafting rules and regulations 
that are responsive to the experiences of institutions of 
varying size.

   LIn your opinion, have the Federal financial 
        regulators been successful in formulating policies in 
        such a way?

   LWhat are the challenges to formulating policies 
        that are responsive to the experiences of institutions 
        of varying size? What do you plan to do as Assistant 
        Secretary to mitigate those challenges?

A.4. A key objective of financial regulatory policy should be 
to scale regulations appropriately so that our financial system 
is safe and resilient while remaining innovative and dynamic. 
The Dodd-Frank Act codifies this principle by providing for 
regulators to adopt a tailored regulatory framework that 
focuses the most stringent standards on the largest, most 
complex financial institutions, such as enhanced capital, 
liquidity, and risk management requirements. Our regulatory 
approach must properly account for the fact that smaller 
institutions, such as community banks and credit unions, 
present a different set of risks than larger firms. I spend a 
lot of time talking to representatives of financial 
institutions of all sizes to better understand the challenges 
they face, and, if confirmed, I will continue working with 
regulators so that rules and supervisory expectations are 
calibrated in a manner that enables firms to thrive while 
remaining safe and sound.
                                ------                                

  RESPONSES TO WRITTEN QUESTIONS OF SENATOR BROWN FROM JAY N. 
                             LERNER

Q.1.a. The Department of Justice's Office of Professional 
Responsibility and the FDIC's Office of the Inspector General 
recently completed reports regarding DOJ's ``Operation Choke 
Point'' and the FDIC's supervisory approach to institutions 
that conducted business with merchants associated with high-
risk activities. OPR found no wrongdoing by the DOJ, and the 
FDIC OIG found the FDIC's role in Operation Choke Point to be 
inconsequential. The FDIC OIG determined that the FDIC's 
supervisory approach was within its authorities, and that there 
was no evidence that the FDIC used the high-risk list to target 
financial institutions. The FDIC OIG also determined that the 
five officials at the FDIC did not play a role in the 
development or implementation of Operation Choke Point. The 
FDIC OIG provided recommendations to the FDIC to review and 
clarify, as appropriate, existing policy and guidance 
pertaining to the provision and termination of banking 
services; assess the effectiveness of the FDIC's supervisory 
policy and approach after a reasonable period of time is 
allowed for implementation; and coordinate the FDIC's Legal 
Division to review and clarify, as appropriate supervisory 
policy and guidance.
    Do you have any concerns about the completeness or 
conclusions of these reports?
A.1.a. I have reviewed the ``Operation Choke Point'' reports 
written by the Department of Justice's Office of Professional 
Responsibility and the Federal Deposit Insurance Corporation 
(FDIC) Office of the Inspector General (OIG) (as referenced in 
the question), and I do not have information at this time that 
would cause me concern about the completeness of or conclusions 
contained in the reports.

Q.1.b. If confirmed, you will be responsible for monitoring the 
FDIC's implementation of the OIG's recommendations. What will 
you do to carry out this responsibility?

A.1.b. If confirmed as FDIC Inspector General, I would follow 
up on the recommendations made in the FDIC-OIG report on 
``Operation Choke Point.'' I intend to learn more about what 
has been done by the FDIC with respect to the issues identified 
in the report and encourage the FDIC Chairman and other FDIC 
officials to implement remaining recommendations. If confirmed, 
my goal as Inspector General would be to make recommendations 
to improve the FDIC's programs and operations, and to ensure 
implementation in an effective and efficient manner.
```