A new year and new Congress always bring a fresh start and an opportunity to refocus. Republicans plan to take full advantage of our new majority and get to work on advancing our priorities that have taken a backseat over the last few years while we were in the minority. I’ll have more on that later as we sort out subcommittee assignments on the House Financial Services Committee. My focus as we head into the 118th Congress is our nation’s current economic status and where we go with it as we move forward and address the issues at hand.
Over the last two years, we’ve been on an economic rollercoaster with inflation hitting a 40-year high, labor issues, and supply chain problems that have affected every family in America and every corner of our economy. On the surface, it seems like some areas are improving like unemployment numbers that came in at just 3.5% in December. But the underlying existing economic issues point to the recession community bankers have been predicting. As I write this, the Community Bank Sentiment Index found that 96% of community bankers who participated in the survey believe this country is already in a recession. The American Banker reported on a recent poll from the Risk Management Association that found that 84% of lenders polled ranked loan loss as a top concern, second only to cybersecurity with 85%. Community bankers are seeing the writing on the wall, and the effects are beginning to show with the way American consumers are spending their money and handling their finances.
A January survey by Vanguard found that many Americans are dipping into their retirement savings early to cope with the economic headwinds households across our country have faced over the last two years. People are also being forced to rely on credit cards more than ever, with 46% of American cardholders carrying a monthly debt over the last year. Life in this country has become increasingly unaffordable, and everyday Americans are risking their financial health and savings just to get by. While there is certainly nothing wrong with accessing and utilizing credit, American families shouldn’t have to be wholly reliant on credit cards and spending their retirement prematurely because of bad government policies. With a possible recession on the horizon, my colleagues and I on the Financial Services Committee know that righting the ship is urgent. Our initial plan is pretty simple. First and foremost, we need to stop spending money we don’t have which has led to this historic inflation. We also need to ensure banking regulators do not put more regulatory burdens on banks, hindering their ability to meet the credit needs of consumers. And we need to make sure the banking regulators don’t alter the bank capital regime to unnecessarily burden banks, sucking much-needed capital out of the economy. With that being said, the House is just one half of the legislature and Democrats are still in charge of the Senate and White House. So we will also be continuing rigorous oversight and ensuring we are governing responsibly.
The good news is community banks here in Missouri and across the country are well capitalized to absorb potential losses from credit risk and are acutely aware of the credit risks on your balance sheets to weather the potential storms ahead. As a former banker and in my capacity on the Financial Services Committee, this is very much on my radar. Looking out for the health of the banking industry — the bedrock of the American economy — is vital to the success of our country as a whole. What you do for our communities is extremely important and I thank you for your work that keeps businesses, households, and everything in between running. As we move forward in the year and this new Congress, please don’t hesitate to reach out to me to make us aware of issues on the ground. I cannot tell you how much I value your input and look forward to speaking to you soon. Happy New Year!
