WEBVTT

00:02.033 --> 00:05.233 align:left position:10%,start line:77% size:80%
JUDY WOODRUFF: A decade after
the financial crisis spurred
tough financial regulation,

00:05.233 --> 00:09.633 align:left position:10%,start line:77% size:80%
the U.S. Senate took a
step toward rolling back
some of those rules today.

00:09.633 --> 00:14.633 align:left position:10%,start line:77% size:80%
Republicans were joined by
more than a dozen Democrats to
move forward with a bill easing

00:16.200 --> 00:19.733 align:left position:20%,start line:77% size:70%
requirements on banks
worth $50 billion to
$250 billion in assets.

00:21.600 --> 00:24.966 align:left position:10%,start line:77% size:80%
Specifically, those institutions
wouldn't have to pass an
annual stress test, as it's

00:26.900 --> 00:30.466 align:left position:10%,start line:77% size:80%
called, to make sure they are
strong enough to survive a
financial panic or keep as much

00:31.066 --> 00:33.133 align:left position:30%,start line:89% size:60%
capital on hand.

00:33.133 --> 00:37.700 align:left position:20%,start line:71% size:70%
Critics, including
most Democrats, worry
that these moves could
increase the chances of

00:38.600 --> 00:40.733 align:left position:10%,start line:89% size:80%
bank bailouts in the future.

00:40.733 --> 00:45.066 align:left position:10%,start line:77% size:80%
But Senator Heidi Heitkamp,
a Democrat from North Dakota,
supports it, and she joins me

00:45.066 --> 00:46.500 align:left position:40%,start line:89% size:50%
now.

00:46.500 --> 00:48.466 align:left position:10%,start line:83% size:80%
Senator Heitkamp, welcome
to the "NewsHour."

00:48.466 --> 00:51.466 align:left position:10%,start line:77% size:80%
And I want to get to the
banking story in just a moment,
but first I have to ask you

00:51.466 --> 00:55.933 align:left position:10%,start line:77% size:80%
about our lead tonight, and that
is the surprise announcement
from the White House that the

00:55.933 --> 01:00.933 align:left position:10%,start line:77% size:80%
president's chief economic
adviser, Gary Cohn, is stepping
down after what has clearly been

01:02.866 --> 01:06.133 align:left position:10%,start line:77% size:80%
a dispute with the president,
who he works for, over imposing
tariffs on imported steel

01:08.300 --> 01:09.666 align:left position:30%,start line:89% size:60%
and aluminum.

01:09.666 --> 01:10.933 align:left position:10%,start line:89% size:80%
What's your thought about that?

01:10.933 --> 01:11.833 align:left position:20%,start line:83% size:70%
How is that going to
affect trade policy?

01:11.833 --> 01:13.933 align:left position:40%,start line:89% size:50%
SEN.

01:13.933 --> 01:16.033 align:left position:20%,start line:71% size:70%
HEIDI HEITKAMP (D),
North Dakota: Well, I'm
deeply concerned that
we won't have that voice

01:16.033 --> 01:20.600 align:left position:10%,start line:77% size:80%
that is the voice of reason in
the White House as it relates
to economic understanding of

01:21.333 --> 01:23.266 align:left position:20%,start line:89% size:70%
the importance of trade.

01:23.266 --> 01:27.433 align:left position:10%,start line:77% size:80%
Less than 5 percent globally
of people in the world
live in this country.

01:27.433 --> 01:29.466 align:left position:20%,start line:83% size:70%
If we're not trading,
we're going to fail.

01:29.466 --> 01:33.866 align:left position:10%,start line:77% size:80%
I think that one of the biggest
concerns I have with the White
House is their trade policy.

01:33.866 --> 01:38.433 align:left position:10%,start line:77% size:80%
Gary was a great advocate for
common sense as it relates to
trade, and I find it deeply

01:38.433 --> 01:40.600 align:left position:20%,start line:83% size:70%
disturbing that he
will be leaving.

01:40.600 --> 01:44.466 align:left position:10%,start line:77% size:80%
JUDY WOODRUFF: What does it
mean for your state or North
Dakota if these tariffs take

01:44.466 --> 01:45.466 align:left position:40%,start line:89% size:50%
effect?

01:45.466 --> 01:48.100 align:left position:40%,start line:89% size:50%
SEN.

01:48.100 --> 01:50.666 align:left position:10%,start line:71% size:80%
HEIDI HEITKAMP: Well,
we don't know yet which
countries are going to be
involved, but obviously

01:50.666 --> 01:54.466 align:left position:10%,start line:71% size:80%
all of the concerns about
renegotiating NAFTA has
had huge ramifications
in our relationships

01:56.466 --> 02:01.233 align:left position:10%,start line:77% size:80%
across both borders, both
Mexico and Canada, which are
our largest trading partners.

02:03.300 --> 02:08.266 align:left position:10%,start line:77% size:80%
We are deeply concerned about
the renegotiation of NAFTA and
retaliation in the event these

02:09.000 --> 02:11.100 align:left position:20%,start line:89% size:70%
tariffs go into effect.

02:11.100 --> 02:13.566 align:left position:10%,start line:77% size:80%
JUDY WOODRUFF: Well, let me
ask you now about this banking
legislation that moved forward

02:13.566 --> 02:15.500 align:left position:20%,start line:89% size:70%
in the Senate today.

02:15.500 --> 02:19.800 align:left position:10%,start line:77% size:80%
As we said, it would exempt
something like two dozen
banks, financial companies that

02:21.366 --> 02:24.633 align:left position:20%,start line:77% size:70%
are somewhere between
$50 billion and $250
billion in assets.

02:24.633 --> 02:29.633 align:left position:10%,start line:77% size:80%
They wouldn't be subject
to the same sort of federal
oversight that they are now and

02:30.366 --> 02:32.433 align:left position:20%,start line:89% size:70%
other requirements.

02:32.433 --> 02:36.300 align:left position:10%,start line:77% size:80%
Why -- as you know, the concern
about this is that it means if
we come to the next financial

02:38.300 --> 02:41.800 align:left position:10%,start line:77% size:80%
crisis in this country, these
banks are going to be back
where we were in 2008, needing

02:42.966 --> 02:44.166 align:left position:20%,start line:83% size:70%
a big bailout from the
federal government.

02:44.166 --> 02:45.866 align:left position:40%,start line:89% size:50%
SEN.

02:45.866 --> 02:48.033 align:left position:20%,start line:77% size:70%
HEIDI HEITKAMP: Well, I
think that's completely
overstating the case.

02:48.033 --> 02:52.566 align:left position:10%,start line:77% size:80%
Number one, I think at the
top of the hour you said that
they no longer are going to

02:52.566 --> 02:54.166 align:left position:10%,start line:89% size:80%
be subject to stress tests.

02:54.166 --> 02:56.200 align:left position:30%,start line:89% size:60%
That's not true.

02:56.200 --> 03:00.566 align:left position:10%,start line:77% size:80%
The Fed has complete ability to
stress test and to put anyone
back into that designation

03:01.666 --> 03:03.300 align:left position:20%,start line:89% size:70%
if it's appropriate.

03:03.300 --> 03:06.866 align:left position:20%,start line:77% size:70%
But remember this,
because Countrywide has
been used as an example.

03:06.866 --> 03:10.000 align:left position:20%,start line:77% size:70%
We have not changed the
rules as it relates to
qualifying mortgages.

03:10.000 --> 03:15.000 align:left position:10%,start line:71% size:80%
We have not changed the
rules as it relates to
whether the Fed can stress
test these institutions.

03:16.100 --> 03:17.566 align:left position:20%,start line:83% size:70%
We still have
liquidity standards.

03:17.566 --> 03:20.900 align:left position:10%,start line:83% size:80%
And so what we did is, we
basically moved an assumption.

03:20.900 --> 03:25.266 align:left position:10%,start line:77% size:80%
And that assumption is that,
if you're below $50 billion,
you do not present systematic

03:25.266 --> 03:27.966 align:left position:20%,start line:89% size:70%
risk to the economy.

03:27.966 --> 03:31.366 align:left position:10%,start line:71% size:80%
We said let's take a look
at 250 as the presumption,
but anything below that,
where there is systematic

03:33.000 --> 03:35.733 align:left position:20%,start line:77% size:70%
risk, could still be
included and still be
regulated accordingly.

03:35.733 --> 03:39.666 align:left position:10%,start line:77% size:80%
JUDY WOODRUFF: Well, there
still would be - - as you say,
there would be some stress

03:39.666 --> 03:43.000 align:left position:10%,start line:83% size:80%
testing, but much less than
what we're talking about now.

03:43.000 --> 03:48.000 align:left position:20%,start line:71% size:70%
The small banks, as we
understand it, would
no longer -- there
would no longer be some

03:50.033 --> 03:53.233 align:left position:10%,start line:77% size:80%
protections for homeowners,
for example, to go to court to
prevent wrongful disclosures.

03:55.166 --> 03:59.100 align:left position:10%,start line:77% size:80%
In other words, these banks
are being given a break because
they say there's just been

03:59.866 --> 04:00.733 align:left position:20%,start line:89% size:70%
too much paperwork.

04:00.733 --> 04:02.200 align:left position:40%,start line:89% size:50%
SEN.

04:02.200 --> 04:04.233 align:left position:10%,start line:83% size:80%
HEIDI HEITKAMP: I think that's
way overstating the case.

04:04.233 --> 04:06.700 align:left position:10%,start line:89% size:80%
Let me tell about North Dakota.

04:06.700 --> 04:11.533 align:left position:10%,start line:77% size:80%
North Dakota doesn't have those
institutions making mortgages
because the compliance costs

04:11.533 --> 04:14.700 align:left position:10%,start line:83% size:80%
are way too expensive for
these small community banks.

04:14.700 --> 04:19.700 align:left position:10%,start line:77% size:80%
And, as a result, they're either
doing loans that are recourse
loans, using other collateral

04:19.700 --> 04:24.700 align:left position:10%,start line:77% size:80%
like your paycheck, as opposed
to your mortgage, or they're
basically transitioning those to

04:26.100 --> 04:28.233 align:left position:10%,start line:89% size:80%
large banks like Wells Fargo.

04:28.233 --> 04:32.700 align:left position:20%,start line:71% size:70%
And when you don't have
relationship lending,
you're losing a big part
of that capitalization

04:33.433 --> 04:34.500 align:left position:20%,start line:89% size:70%
in rural communities.

04:34.500 --> 04:36.733 align:left position:20%,start line:83% size:70%
And so the
protections are there.

04:36.733 --> 04:39.866 align:left position:20%,start line:71% size:70%
And, you know, I find
it interesting, because
people always want to
say, oh, these banks

04:39.866 --> 04:43.133 align:left position:10%,start line:83% size:80%
are going to take advantage
of all these consumers.

04:43.133 --> 04:45.333 align:left position:20%,start line:83% size:70%
These banks are run
by your neighbors.

04:45.333 --> 04:47.266 align:left position:10%,start line:89% size:80%
They're owned by your neighbors.

04:47.266 --> 04:51.366 align:left position:10%,start line:77% size:80%
They have been doing business
for years and generations
in these communities.

04:51.366 --> 04:56.233 align:left position:10%,start line:77% size:80%
And I think they know better
what the community needs
than a federal regulator.

04:56.233 --> 04:58.233 align:left position:20%,start line:83% size:70%
And let's put this
back in focus.

04:58.233 --> 05:03.133 align:left position:10%,start line:77% size:80%
The reason why you have the
mortgage standards that you
have is to prevent a collapse of

05:04.566 --> 05:08.333 align:left position:10%,start line:83% size:80%
the economy using mortgage as
a collateral in derivatives.

05:10.400 --> 05:15.300 align:left position:10%,start line:77% size:80%
So if you take these small
community banks, they were never
part of the too big to fail.

05:15.300 --> 05:19.433 align:left position:20%,start line:77% size:70%
And what we have created
from too big to fail is
too small to succeed.

05:19.433 --> 05:24.433 align:left position:10%,start line:77% size:80%
And so I have total confidence
that my community banks know
better what my communities need

05:26.366 --> 05:30.466 align:left position:10%,start line:77% size:80%
than a federal regulator who
is trying to impose big bank
standards on our small community

05:30.933 --> 05:33.000 align:left position:40%,start line:89% size:50%
banks.

05:33.000 --> 05:35.333 align:left position:10%,start line:77% size:80%
JUDY WOODRUFF: How do you know,
though, Senator Heitkamp, that
-- there are -- clearly, some

05:35.333 --> 05:37.500 align:left position:10%,start line:89% size:80%
regulations need to be in place.

05:37.500 --> 05:40.266 align:left position:10%,start line:77% size:80%
How do you know that the
right regulations are
still going to be in place?

05:40.266 --> 05:45.133 align:left position:10%,start line:77% size:80%
For example, there is concern
about whether banks, they
won't have to report -- some of

05:45.133 --> 05:49.766 align:left position:10%,start line:77% size:80%
them, a number of them won't
have to report the diversity
of people that they lend money

05:49.766 --> 05:51.800 align:left position:40%,start line:89% size:50%
to.

05:51.800 --> 05:56.133 align:left position:10%,start line:77% size:80%
In other words, there are
some regulations in there now
that people say that need to

05:57.700 --> 05:59.633 align:left position:20%,start line:77% size:70%
be continued, whether
they are done in exactly
the same way or not.

05:59.633 --> 06:01.166 align:left position:40%,start line:89% size:50%
SEN.

06:01.166 --> 06:02.366 align:left position:10%,start line:83% size:80%
HEIDI HEITKAMP: Well,
let's take the HMDA rules.

06:02.366 --> 06:04.833 align:left position:20%,start line:83% size:70%
And that's been a point
of contention here.

06:04.833 --> 06:09.833 align:left position:10%,start line:77% size:80%
We are not eliminating the
standard of making sure that
we have fair lending rules.

06:11.133 --> 06:13.833 align:left position:20%,start line:83% size:70%
There were fair lending
rules before Dodd-Frank.

06:13.833 --> 06:18.833 align:left position:10%,start line:77% size:80%
The HMDA rules, which have
been covered by all banks, are
40 pages of regulation that

06:20.800 --> 06:24.366 align:left position:10%,start line:77% size:80%
doesn't actually add any
value to making sure that
there isn't discrimination.

06:26.333 --> 06:29.800 align:left position:10%,start line:77% size:80%
We're saying, look, we will
eliminate that rule-making
for the smaller institutions,

06:29.800 --> 06:34.800 align:left position:10%,start line:77% size:80%
but if you fail, if you're
a bad actor, we're going to
impose these regulations back on

06:35.266 --> 06:37.400 align:left position:40%,start line:89% size:50%
you.

06:37.400 --> 06:40.566 align:left position:10%,start line:77% size:80%
And the one thing that I think
is critically important, when
you over-regulate, eventually,

06:40.566 --> 06:44.733 align:left position:10%,start line:83% size:80%
you reach a tipping point where
everything is at question.

06:44.733 --> 06:49.433 align:left position:20%,start line:71% size:70%
We are doing very
modest and very limited
changes to Dodd-Frank
to respond to what we're

06:49.433 --> 06:52.733 align:left position:10%,start line:83% size:80%
hearing on main streets in
small communities like mine.

06:52.733 --> 06:54.833 align:left position:10%,start line:89% size:80%
And we're proud of this bill.

06:54.833 --> 06:59.200 align:left position:10%,start line:77% size:80%
We think that the results of
this bill have been completely
overstated by people who have

07:01.300 --> 07:04.333 align:left position:10%,start line:77% size:80%
been advocating against this
bill because they want to
see fundamentally absolutely

07:05.900 --> 07:08.266 align:left position:20%,start line:77% size:70%
no change to Dodd-Frank,
even if the regulation
doesn't make sense.

07:08.266 --> 07:12.033 align:left position:10%,start line:77% size:80%
JUDY WOODRUFF: Senator
Heidi Heitkamp of North
Dakota, thank you very much.

07:12.033 --> 07:13.033 align:left position:40%,start line:89% size:50%
SEN.

07:13.033 --> 07:13.166 align:left position:10%,start line:89% size:80%
HEIDI HEITKAMP: Thank you, Judy.