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JONES REJECTS FED APPROVAL FOR CHINESE-CONTROLLED BANKS TO OPERATE IN THE U.S.
WASHINGTON, D.C. – Last week U.S. Congressman Walter B. Jones (NC-3) joined six Republican colleagues in expressing disapproval of the Federal Reserve Board’s approval for three Chinese banks to operate in the U.S. under the International Banking Act. In a letter to Federal Reserve Chairman Ben Bernanke, Jones and his colleagues expressed tremendous concern that by allowing banks owned by the Chinese government into our country, our national security interests could be compromised, as well as the stability of the U.S. banking system as a whole.
“In these difficult economic times, it is imperative that we do all we can to ensure our domestic economic security,” said Jones. “We need to hold hearings to look at these decisions made by the Federal Reserve and make sure that there is proper supervision in place.”
Jones and his colleagues submitted a list of questions and requested that Chairman Bernanke respond to the questions regarding his decision to allow the Chinese government controlled banks to operate within our borders.
- Did the Federal Reserve consult with our national security leaders before the approval of these applications, and if so, who?
- Did the Federal Reserve consult the Treasury Secretary prior to voting to approve these applications? If so, what was the response from the Treasury Secretary?
- Given that at least one of these banks is larger than the largest U.S. domiciled bank, does the Federal Reserve consider any of these banks to be systemically important financial institutions (SIFIs)? If so, does the Federal Reserve intend to recommend they are regulated under Title I of Dodd-Frank?
- Will the Federal Reserve have access to information regarding the parent banks headquartered in China?
- Will the Federal Reserve be coordinating with Chinese bank regulators to ensure the safety and stability of the financial sector?
- Has the Federal Reserve required additional data security measures to both the Federal Reserve data system and for these three Chinese banks to protect confidential information from potential breaches?
- Did these three applications go through a Committee on Foreign Investment in the United States (CFIUS) review prior to the Federal Reserve Board approving these applications?
Joining Congressman Jones in this effort were Rep. Lynn Westmoreland (GA-3), Rep. Bill Huizenga (MI-2), Rep. Bill Posey (Fl-15), Rep. Blaine Luetkemeyer (MO-9), Rep. Sandy Adams (FL-24) and Rep. Thaddeus McCotter (MI-11).
A copy of the letter can be viewed below.