Ricketts Rebuts Elizabeth Warren’s False Claim That CFPB is Only Cop on the Beat: “We Ought Not to Try and Scare Consumers Right Now”

February 11, 2025

WASHINGTON, D.C. – Today, U.S. Senator Pete Ricketts (R-NE), a member of the Senate Committee on Banking, Housing, and Urban Affairs, rebutted a false claim by Ranking Member Elizabeth Warren (D-MA) that the Consumer Financial Protection Bureau (CFPB) is the only entity responsible for protecting consumers in the banking industry.

“I want to address something that the Ranking Member started talking about, which was characterizing the CFPB as being the cop on the beat here,” Ricketts said. “But I can tell you, having been a Governor and having a Department of Banking that reported to me, that if any consumer would contact us and make a complaint about a bank, even a big bank like JP Morgan, we would investigate. As could the OCC, the FDIC, FTC. So to characterize it ‘no one is out there working for consumers’ is inaccurate. And we ought not to try and scare consumers right now that somehow this is the case.”

During questioning of Federal Reserve Chair Jerome Powell, Ricketts also highlighted his concerns about the expansion of the Federal Reserve’s balance sheet.

“The Fed’s balance sheet at the end of 2019, so before the pandemic, was about $4.1 trillion,” Ricketts said. “By May of 2020, the Fed expanded that to $7 trillion, and by 2022, the Fed’s balance sheet hit an all-time record of $8.9 trillion. Inflation peaked at 9.1% that year, a high we had not seen since 1981. Now, I’m encouraged by the actions the Fed has taken with quantitative tightening, to shrink the balance sheet down to $6.85 trillion, but $6.85 trillion is still too high.”

Ricketts’ comments came in a hearing of the Committee on Banking, Housing, and Urban Affairs entitled: “The Semiannual Monetary Policy Report to the Congress.”

TRANSCRIPT:

Senator Ricketts: “Well thank you, Mr. Chairman and Ranking Member for holding this important hearing and thank you Chairman Powell for being here today to talk about our economy and all of the things that are going on.

“I want to address something that the Ranking Member started talking off about, which was characterizing the CFPB as being the cop on the beat here. But I can tell you, having been a governor and having a Department of Banking that reported to me, that if any consumer would contact us and make a complaint about a bank, even a big bank like JP Morgan, we would investigate, as could the OCC, FDIC, FTC.

“So to characterize it ‘nobody’s out there looking for consumers,’ I think is inaccurate.

“And we ought not to try and scare consumers right now that somehow, this is the case, because if you do have an issue, if you’re a consumer, please reach out to your state Department of Banking because those folks are going to look out for you.

“I can tell you that because I used to have one of those Department of Banking, so they did a fantastic job of looking out for the consumers.

“One of the things that has also impacted consumers is inflation. Prices under the Biden Administration were up 20%. An average household is paying $13,000 more today than they were for the same standard of living they had before Joe Biden got elected. We see that, grocery prices, for example, are up 22%, rents up 23%. Simply put, Nebraskans are economically worse off today than they were four years ago, and I expect that that’s part of the reason why we saw this change in the administration. They thought that that was not something that they wanted to continue to pursue. They didn’t want the same policies being followed. We have to end the reckless federal spending, rein in inflation and, you know, be responsible about how we make decisions to be able to grow the economy.

“One of those areas that I’m concerned about is the expansion of the Fed balance sheet. The Fed’s balance sheet before, at the end of 2019, so before the pandemic was about $4.1 trillion. By May of 2020, the Fed expanded that to $7 trillion, and by 2022, the Fed’s balance sheet hit an all-time record of $8.9 trillion. Inflation peaked at 9.1% that year, a high we had not seen since 1981. Now, I’m encouraged by the actions the Fed has taken with quantitative tightening, to shrink the balance sheet down to $6.85 trillion, but $6.85 trillion is still too high. And one of my concerns with this, Chairman, is that, that’s kind of what are your tools, to be able to guard against a downturn in the economy or some sort of shock? Obviously used it during the pandemic. Looking ahead long term, will the Fed Reserve continue to this course of unwinding the balance sheet?”

Chairman Jerome Powell: “Yeah. So, what we said is that we intend to slow and then stop the decline when reserve balances are somewhat above the level that we judge, consistent with so-called ample reserves. The most recent data and the feel of the markets is definitely the reserves are still abundant. They’re about the level that they were at when run off started because the, the run off is really happened out of the overnight repo facility, reverse repo. So yes, it’s, it’s an ongoing thing and we’re not, we’re not yet we’re where we’re headed.”

Senator Ricketts: “So what kind of pace can we expect, and I know that obviously there’s going be a lot of factors like what happens to the economy over the course of next year, but if you were, if things were going to go along the way you are today, you’ve already said the economy’s doing well, inflation’s a little higher than we want it to be at 2.6%, but unemployment’s at 4%. If these conditions, and I think you use the word stable quite a bit, if these conditions were to remain stable throughout the course of the year, would you have a range to give us a where the balance you might be, if we were talking again here in January 2026?”

Chairman Jerome Powell: “We basically we’re going to be, looking at reserve conditions, conditions in reserve markets, and trying to stop a little bit above what we consider ample. And we think we’re, you know, meaningfully above that now. We, we can’t put a number on it because you can’t directly know the demand for reserves other than by observing behavior in the market and then putting a little bit of a of a buffer on it. So I can’t give you an exact number. But for now, it’s ongoing and we have a ways to go.”

Senator Ricketts: “What kind of conditions would happen, have to happen for you to start going back to quantitative easing?”

Chairman Jerome Powell: “You know, so quantitative easing, so, you know, that’s a tool we, we tend to use when we’re at the effect of lower bound and we can’t cut interest rates anymore, so nothing like what you’re seeing in the current day. It’s a different test for stopping quantitative tightening, but we would use QE going forward only, only in a situation where when we’re rates are at zero and, you know, we’re a long way from zero now.”

Senator Ricketts: “So that, you think that, again, just generally speaking, then if things remain stable, you’ll continue to unwind the balance sheet, you’ll continue to the quantitative tightening? Can’t give me a range on that, is that what I hear you saying?”

Chairman Jerome Powell: “That’s right, that’s right.”

Senator Ricketts: “Okay. Great. Well, I encourage you to keep doing that because, again, I think that’s important, to be able to make sure that you’ve got powder, for the next, issue that we may face. So, thank you very much. Mr. Chairman, I appreciate you being here.”