Federal Reserve Chair Jerome Powell Reassures on Payments System Security, Addresses Musk's Influence
Federal Reserve Chair Jerome Powell has provided assurances about the security of the Treasury Department's payments system, following concerns raised by Elon Musk's recent access.
System Integrity and Resilience
During a Senate Banking Committee appearance, Powell asserted his belief in the "integrity, efficacy, and resilience" of the payments system. He emphasized its critical role in supporting the financial system.
Musk's Access and CFPB Concerns
Powell denied knowledge of Musk's attempts to access the Fed. However, he acknowledged concerns raised by Democratic lawmakers about Musk's involvement in the Treasury Department and the Consumer Financial Protection Bureau (CFPB).
Fed's Role in Treasury and CFPB
Powell clarified that the Fed does not determine spending decisions for the Treasury or the CFPB. However, he acknowledged that the CFPB's weakened regulatory role could leave consumers exposed to financial risks.
Warren's Concerns and Regulatory Oversight
Massachusetts Senator Elizabeth Warren expressed concerns about the CFPB's ability to oversee large banks in the absence of other regulators. The legislation establishing the CFPB granted it exclusive authority in this area.
Powell's Stance on Bank Regulations and Trump Policies
Powell indicated a willingness to review bank capital standards and work on revising the Basel III proposal. While acknowledging potential economic impacts of Trump's tariff policies, he declined to speculate on specific outcomes.
Independence of the Fed
Powell reiterated his position that the law prohibits the President from removing Fed board members without cause.