Good afternoon. Thank you, Antonio, for the kind introduction, and thank you, Jim, for inviting me to speak before the CUNA Governmental Affairs Conference.
Just as I regard my service on the NCUA Board as an honor, I also consider this opportunity to address you today as a great privilege.
Taxi Medallion Loan Portfolio Sale
Please allow me to commence today with a timely and significant issue: that is, the recent sale of the agency’s taxi medallion loan portfolio. Some have objected to the sale, and I respect their opinion as reasonable minds may differ. In order, hopefully, to assist you in better understanding this issue, I will offer my perspective for your consideration.
As many of you are aware, approximately three years ago, the National Credit Union Administration (NCUA) conserved Melrose Credit Union and LOMTO Federal Credit Union, two financial institutions that specialized in making loans to the purchasers of taxi medallions. Following this action, the NCUA booked approximately $750 million of losses to the National Credit Union Share Insurance Fund (Share Insurance Fund) and took possession of a sizable taxi medallion loan portfolio as the liquidating agent pursuant to the Federal Credit Union Act (FCUA) and the agency’s regulations.1
As the liquidating agent, the NCUA was charged, under the FCUA, with developing a plan that would yield the least long-term cost to the Share Insurance Fund.2 In discharging that statutory duty, we retained the services of outside consultants and investment advisors who assisted us in developing a plan to sell the taxi medallion loan portfolio pursuant to an open and transparent auction process. We made it very clear to those interested in acquiring the portfolio that the winning bidder must work with the taxi medallion loan borrowers in a transparent, good-faith manner and in full compliance with all applicable consumer protection laws. We specifically excluded vulture funds from the process and eliminated any prospective purchasers who did not demonstrate: the capacity to adequately service the loans, a track record of treating borrowers in a fair-mined manner, and a financially workable bid.
After approximately 18 months of managing the assets, conducting due diligence investigations, and negotiating with prospective purchasers, the agency, with the assistance of our consultants and advisors, identified a winning bidder who offered the least-cost option to the Share Insurance Fund and satisfied our good-faith and fair dealing requirements. As we were preparing to move forward and close the sale, we learned of a possible initiative from the New York Taxi Workers Alliance to form a public/private partnership to purchase the agency’s medallion loan portfolio. A delegation of senior staff from the agency, including the president of the Asset Management Assistance Center (AMAC), the executive director, the chief financial officer, the general counsel, and the director of examinations and insurance, traveled to New York and met with senior representatives from the mayor’s office and a member of the city council. They also met with the executive director of the New York Taxi Worker’s Alliance and a number of taxi drivers in Alexandria.
Regrettably, the senior staff determined that no party had committed funds, or had demonstrated a reasonable prospect of raising sufficient funds in the near-to-intermediate term, if ever, to purchase the agency’s taxi medallion loan portfolio. At best, the parties had a plan to develop a plan to raise an unspecified amount of funds to purchase the medallion portfolio at an unspecified price pursuant to an unspecified timetable.3 The NCUA staff reported that, although the New York parties were no doubt acting in good faith, they entered into the bidding process for the medallion loan portfolio at the 11th hour without a reasonable prospect of closing an acquisition in the foreseeable future.
Given our statutory duty to dispose of the taxi medallion loan portfolio at the least cost to the Share Insurance Fund, we determined that it was not appropriate to postpone the sale. If we had postponed the sale, it was abundantly clear that we would have lost the winning – that is, the least-cost – bidder that was ready, willing, and able to close at that time. In such an event and if the New York parties were eventually unable to meet or exceed that offer, there is a substantial likelihood that the Share Insurance Fund would suffer additional material losses. We concluded that assuming this distinct and palpable risk, although otherwise viscerally compelling, violated our duty as fiduciaries.
As I noted, the NCUA, to date, has booked approximately $750 million of taxi-medallion-related losses to the Share Insurance Fund. This has precluded the agency from making distributions of up to that amount – $750 million – to the credit union community, including Low-Income Credit Unions, Minority Depository Institutions and Community Development Credit Unions.4 We should remember that credit union members are not the elites, but those of the middle class and those working to join the middle class, and they are not unlike the taxi drivers and individual medallion owners considered here. If we were to have delayed the disposition of the medallion loan portfolio based upon the facts before us at that time and the profound uncertainty associated therewith, there is a substantial likelihood that the agency would have to forego distributions to credit unions for the intermediate future, if not longer.
Notwithstanding our statutory duty as liquidating agent, it was an exceedingly difficult decision to sell the medallion loan portfolio after meeting with the New York Taxi Worker’s Alliance, taxi drivers, and other interested parties. It is critically important to note that we would not have permitted the sale to proceed unless we sincerely believed, based upon our due diligence investigation, that the winning bidder would treat taxi medallion borrowers in a transparent, good-faith manner and in full compliance with all applicable consumer protection laws. As we are deeply sorry for the loss and suffering experienced by taxi drivers and medallion owners over the past several years, this was a principal goal in conducting the auction process and vetting prospective bidders.
There are, of course, other viable options available to the New York public/private partnership to assist the medallion borrowers. For example, if ultimately successful in raising funds or receiving legislative appropriations or proceeds from litigation, the partnership and other interested parties could employ the proceeds to assist the medallion borrowers by directly repaying some or all of their outstanding loan balances or purchasing the loans and forgiving some or all of their debt. That is, all of the proceeds raised by the partnership and other interested parties could relieve the financial burden of the medallion borrowers.
Regulatory Philosophy and Agency Accomplishments
Over the past several years, we have enacted much regulatory relief at the NCUA while protecting consumers, the safety and soundness of the Share Insurance Fund, and the credit union community. We have enacted thoughtfully tailored and targeted rules and regulations aimed at the actual risks presented by the credit union system to the Share Insurance Fund and not those unique risks presented by the large money-center banks.5 We have done this by strictly complying with the letter and spirit of the FCUA and our duty as fiduciaries of the Share Insurance Fund.
There have been some major accomplishments since I joined the NCUA Board over five years ago, many of which were achieved with bipartisanship among the Board members:
- We closed the Temporary Corporate Credit Union Stabilization Fund four years ahead of schedule, thereby allowing the credit union community to avoid a Share Insurance Fund premium assessment of approximately 13 basis points, or about $1.3 billion, while receiving distributions of surplus equity of approximately 8 basis points, or about $800 million. We also enhanced the safety and soundness of the Share Insurance Fund by recapitalizing and fully funding an increase in the Equity Ratio and the Normal Operating Level.6
- We restructured the agency for greater efficiency and cost effectiveness, re-thinking how we deploy our resources. This included consolidating five regional offices into three and eliminating 80 percent of the agency’s leased space.
- We incorporated into the agency’s budget additional cost-saving measures like an extended examination cycle and a smaller agency footprint in credit unions.
- We took a holistic view of the agency’s aging information systems and developed a roadmap for much need updates, starting with the new MERIT system that we will implement this year.
- We made the agency more transparent and accountable by crafting tailored and targeted rules and guidance and identifying outdated and unnecessary regulatory burdens.
- We held public briefings on the agency’s proposed budgets and asked for your comments on our budgets, our plans for improving the Call Report and developing the MERIT system, our methods and procedures for electronic data collection, and, of course, our proposed rules and regulations.
- In addition, we proposed and, in most cases, have already finalized new rules, regulations, guidance, and initiatives, including in the following areas:
- Field of Membership or FOM,
- Member Business Lending or MBL,
- Appeals and due process,
- Payday Alternative Loans 2 or PALs2,
- Low-Income Credit Unions, Minority Depository Institutions, and Community Development Financial Institutions,
- Unserved and Underserved,
- Emergency mergers,
- Capital Planning and Stress Testing,
- Corporate Credit Union Capital Standards,
- Current Expected Credit Loss or CECL,
- Second Chances,
- Risk-Based Net Worth/Capital,
- Subordinated Debt (with a Complex Credit Union Leverage Ratio rule to follow, hopefully, in March), and
- Credit Union/Community Bank Combination Transactions, or Bank Merger, Rule.
Many of these efforts are ongoing, and I am pleased to report we have made substantial progress as an agency in a spirit of collegiality and collaboration. Regulation, supervision, examination, and enforcement should derive from transparent and fully accountable rules and regulations that respect the ability of credit unions to make their own business decisions while allowing for innovation and growth that strengthens the credit union system and, as such, the Share Insurance Fund itself. In this spirit, we continue to challenge ourselves to break down silos that often develop within organizations, to remain open to fresh and innovative ideas and approaches, and to present our proposals for public comment under the Administrative Procedure Act (APA).
Diligence, prudence, transparency, and respect for competing ideas have a practical effect. Millions of Americans from all walks of life have placed their financial well-being with credit unions. In some underserved communities, including low-income and minority communities, credit unions may be the only source of federally insured and affordable consumer-oriented financial services. We have a responsibility to offer all credit union stakeholders and the taxpayers the results of our very best efforts and good-faith, focused diligence. We will work and reason together with you to achieve those goals.
Credit Unions and Community Banks
Come Now, and Let Us Reason Together
In a similar fashion, as I noted in my remarks before the GAC in 2018, it is worth considering whether credit unions and community banks could benefit from a “come now, and let us reason together” approach to create opportunities for addressing their differences as well as the common challenges facing these essential Main Street financial institutions in an evolving consumer-driven marketplace. Working together in good faith with mutual respect for the other reflects strength, not weakness.
Regrettably, two years later, much work remains.
For example, the Independent Community Bankers of America (ICBA) sued the NCUA on the agency’s MBL regulations only to have their suit dismissed by the United States District Court for the Eastern District of Virginia.7 If successful, the ICBA suit would have restricted credit unions from providing small business loans that generate growth and employment and help diversify credit union balance sheets, thereby enhancing the safety and soundness of the Share Insurance Fund and the credit union system. Further, the American Bankers Association (ABA) sued the agency on our FOM regulations only to have their en banc petition denied by the United States Court of Appeals for the District of Columbia.8 If successful, the ABA suit, in part, would potentially enhance the growth of financial deserts by limiting the access of those who reside in rural districts – many of whom are unserved and underserved – to federally insured, consumer-oriented financial institutions, while also threatening safety and soundness. To me, as a safety and soundness, consumer protection, and prudential regulator, these lawsuits – which advocate poor public policy and follow a misguided reading of the FCUA – were hardly “come now and let us reason together” moments.
As of late, the banking industry has argued that credit unions are somehow inappropriately acquiring community banks, given the latter’s perspective of the tax-exempt status of credit unions.9 As I recently noted in my January NCUA Board Statement on Proposed Credit Union Combination Transactions,10 based upon my experience as an M&A, corporate and tax attorney and CPA for approaching 40 years, it is clear to me that market forces and arm’s-length negotiations have driven the recent spate of mergers between credit unions and community banks. That is, as a person who reviews and studies these transactions at the NCUA, the relevant facts indicate that community banks are simply selling their assets to credit unions in market-driven, negotiated transactions. These transactions are not, based upon my analysis as a regulator, hostile or unfair to credit unions, community banks, or consumers.
While some may argue that credit unions and community banks operate as virtually identical financial institutions except for the tax-exempt status of the former, that is not so. In reality, credit unions and community banks are materially different financial institutions, with specific and unique statutory restrictions placed on credit unions under the FCUA in return for their tax-exempt status. For example, the FCUA places limitations on credit union growth through, among others, the following four statutory restrictions:
- Equity and debt capital,
- Field of membership,
- Member business lending, and
- Investment authority.11
More succinctly, the tax exemption granted to credit unions comes with its own set of unique statutory burdens.12 Interestingly, these restrictions do not apply to community banks, even though those institutions may also avoid corporate-level income taxation by making a taxpayer-subsidized S corporation election under the Internal Revenue Code (IRC). In other words, we should remain mindful that it is not intellectually possible to discuss the credit union tax exemption, and the tax policy underlying that exemption, in a fair-minded and objective manner without also acknowledging the additional statutory restrictions placed on credit unions under the FCUA as a quid pro quo for their tax exemption, as well as the absence of any such additional statutory restrictions on community banks under their governing statutes notwithstanding the ability of such institutions to avoid corporate-level income taxation by making a taxpayer-subsidized S corporation election13 under the IRC.14
I must admit, however, that the endless Hatfield-McCoy carping between credit unions and community banks has grown tiresome and of little purpose except, perhaps, as a marketing and membership tool for some. Instead, these financial institutions should acknowledge that their future viability is not so much threatened by each other but will rest on how they respond to the economic and operational challenges presented by, among other matters, the following six issues:
- The branch network of the largest money-center banks,
- App-based and other remote and electronic means of providing financial services,
- Fintech and other non-traditional financial firms,
- Cybersecurity and other emerging threats,
- The continuing innovation in the delivery of financial services that will evolve in unpredictable ways, and
- The maintenance of sufficient regulatory liquidity and capital and the avoidance of lending and investment overconcentration.
As a safety and soundness, consumer protection, and prudential regulator, this is what keeps me up at night. I am far less concerned that a credit union and a community bank may determine that it is in their mutual economic interest to merge together, regardless of whether the credit union or the community bank continues as the surviving financial institution. These transactions reflect market forces and are negotiated in an arm’s-length manner. The NCUA should respect the independent, market-driven business decisions of the interested parties, unless safety and soundness, consumer protection, and related matters indicate to the contrary.15
Averting Financial Crises: Liquidity, Capital, and Overconcentration Risks
In closing,16 I wish to note that over my career, I have witnessed a number of financial crises.17 Although credit unions and the NCUA were not involved in each of these events, it is nevertheless important for credit unions and their regulators to appreciate the common denominators underlying this disparate array of financial disasters that created widespread economic pain and, with respect to the Financial Crisis of 2008/2009, the most severe economic downturn since the Great Depression.
Each of these events was caused, in substantial part, by the over-concentration of banking and other financial assets in narrowly circumscribed areas of lending and investment activity, such as commercial and residential real estate. Simply put, the banking and financial communities stuffed too many eggs in one basket and then proceeded to drop the basket, with the expected result.18 Regardless of the over-concentration of financial resources and the resulting asset bubbles, the adverse economic consequences arising from these events would have been substantially mitigated if the relevant financial institutions had held sufficient levels of regulatory liquidity and capital.
Both the regulators and the regulated must at all times remain mindful that, in a financial crisis or economic downturn, the fate of a financial institution depends upon its liquidity and capital levels. At the height of a financial crisis, when asset values may have fallen or collapsed precipitously, nothing matters more than liquidity or the ability of a financial institution to pay its debts and other obligations as they come due. In tandem with the role of liquidity, capital serves as a buffer to absorb the losses booked from declining asset values that inevitably follow an economic downturn and the often dramatic and unexpected end of myopic financial activity and a bursting asset bubble.
With these ideas in mind, what actions may credit unions take to prepare for the next financial crisis or economic downturn? Here are my five bullet-point thoughts:
- Maintain sufficient levels of liquidity and capital,
- Don’t over-concentrate lending or investment activity,
- Maintain thorough internal controls,
- Anticipate and prepare for cybersecurity threats, and
- Hire people you trust implicitly.
Although not related to a financial crisis or an economic downturn, I also encourage each credit union to strive to better serve the underserved and to develop new and innovative approaches for reaching the unserved and those who are struggling economically.
I will conclude by wishing each of you, as the leaders of the credit union community, with success in your meetings and conferences this week. It has been my pleasure to serve on the NCUA Board for over five years, and I appreciate and thank you for your support and assistance.
1 Since 2017, the agency’s management of the taxi medallion loan portfolio has protected the Share Insurance Fund by reducing exposure to the medallion loan portfolio by more than $40 million, despite the continued deterioration in the underlying economics of the taxi medallion industry: ridership, fare box revenue, and medallion values.
2 As fiduciaries of the Share Insurance Fund, we have a congressionally mandated statutory duty to discharge our responsibilities as liquidating agent so as to "resolve the problems of insured credit unions at the least possible long-term cost to the [Share Insurance] Fund." Section 1790d(a)(1) of the Federal Credit Union Act.
3 It was also unclear how the public/private partnership planned to service the loans.
4 But for the medallion loan losses, and dependent upon NCUA Board action, the distribution to credit unions over the past three years would have approximately doubled.
5 The resolution of these latter risks spawned the $700 billion TARP bailout during the Financial Crisis of 2008/2009.
6 In a nutshell, the early closing of the Stabilization Fund transformed a projected premium assessment into an actual distribution while materially increasing the necessary and appropriate GAAP reserves for potential future Share Insurance Fund losses and maintaining a Normal Operating Level necessary to protect the Share Insurance Fund’s Equity Ratio from falling below 1.20 percent in a moderate recession, as determined by stress test analysis conducted pursuant to Federal Reserve methodology.
For a discussion of the closing of the Temporary Corporate Credit Union Stabilization Fund and setting the Normal Operating Level at 1.39 percent (reduced to 1.38 percent in late 2018), see my statement issued at the September 2017 meeting of the NCUA Board, which included:
“There are three key risks to the Equity Ratio for which the 1.39 percent Normal Operating Level accounts. Specifically, the 1.39 percent level accounts for the following:
- Four basis points to reflect the risk posed by the remaining obligations of the Corporate System Resolution Program;
- Two basis points to reflect the projected decline in the equity ratio through 2018 that will occur even without a recession; and
- 13 basis points of protection for risks to the Equity Ratio posed by insured credit unions.
When combined, this means that 19 basis points above the 1.20 percent statutory minimum—an Equity Ratio of 1.39 percent—is currently needed to protect against a moderate recession.
There is an objective, transparent basis underlying each of these three numbers. The calculations and methodology were thoroughly and transparently described in staff’s presentation to the NCUA Board at its July 2017 open meeting, in the request for comment published in the Federal Register, during a webinar the NCUA hosted on this subject in August 2017, and in all the related materials that are posted on the NCUA’s website. I will reiterate them again here.
First, closing the Stabilization Fund in 2017 will expose the Share Insurance Fund’s Equity Ratio to any change in the remaining obligations of the Corporate System Resolution Program. This risk to the Equity Ratio derives from the remaining legacy assets that cannot be sold until the corresponding NGNs they collateralize mature, for the most part not until 2020 and 2021. The NCUA engaged BlackRock to model the impact on the projected cash flows of the legacy assets based on the Federal Reserve Board’s economic stress scenarios. This analysis concluded that a moderate recession would reduce the value of the Insurance Fund’s claim on the corporate credit union asset management estates by roughly $400 million, which would equate to a reduction in the equity ratio of four basis points. It is critical that the Insurance Fund maintain a sufficient amount of equity to cover potential changes in the value of the claims on the asset management estates of the failed corporate credit unions.
Second, current trends and factors separate from the management of the Stabilization Fund’s assets and liabilities are straining the Equity Ratio of the Share Insurance Fund. The Equity Ratio has been declining over the last several years. We anticipate it will continue to do so, even without an economic downturn. This decline is due to continued strong growth in insured credit unions’ shares and low yields on the Share Insurance Fund’s investments, which are limited by law. Even somewhat optimistic projections indicate a decline of two basis points in the Equity Ratio is expected to occur before the remaining NGNs begin to mature in 2020 and the exposure to the legacy assets can be reduced. Holding the additional two basis points in the Insurance Fund now will help ensure there is sufficient equity to account for the potential decline in value of the claims on the asset management estates and avoid future premiums.
Third, a moderate recession is projected to produce a decline of 13 basis points in the Equity Ratio due to the effects on the three primary and customary drivers of the Share Insurance Fund’s performance: insured share growth, interest income on the fund’s investment portfolio, and insurance losses. The decline of 13 basis points is derived through an analysis that looks at historical relationships to link the three main customary drivers of the Share Insurance Fund’s Equity Ratio to the economic variables contained in the Federal Reserve scenarios. The projections for the drivers are then used to simulate how the fund would perform under an economic stress.”
7 See Independent Community Bankers of America v. Nat’l Credit Union Administration, No. 1:16-cv-01141 (E.D. Va.).
8 See American Bankers Association v. Nat’l Credit Union Administration, 934 F.3d 649 (2019).
9 Matters of federal taxation reside solely within the domain of Congress and not with the NCUA or any other financial institutions regulator.
11 These limitations help explain why very few banks elect to convert to a credit union charter, even though credit unions are not subject to federal income taxation. In addition, community banks may often avoid corporate-level income taxation by making a taxpayer-subsidized S corporation election under the Internal Revenue Code.
12 Specifically, regarding the tax-exempt status of credit unions, banks – particularly those community banks that avoid corporate-level income taxation by making a taxpayer-subsidized S corporation election under the Internal Revenue Code – are, understandably, hesitant to accept any of the following four statutory limitations on their business models and operations in return for a credit union charter:
- relinquish their ability to raise common stock (including for executive compensation purposes) and other equity and debt capital under the FCUA capital restriction,
[Under the FCUA, credit union authority to raise capital for both the Risk-Based Net Worth Ratio (RBNWR) and the Net Worth Ratio (NWR) tests is materially limited. First, under the FCUA, credit unions are limited to issuing debt, as opposed to equity instruments. Stated another way, the FCUA does not authorize credit unions to issue equity capital in a private placement or a public offering. Second, even where the FCUA provides the authority to issue debt, the permissibility of counting that debt towards the RBNWR or the NWR is statutorily limited to complex credit unions, low-income credit unions (LICUs), and new credit unions. Under current NCUA regulation, non-LICUs may only build regulatory capital through the retention of earnings. As a safety and soundness, consumer protection, and prudential regulator, these limitations present formidable challenges to the NCUA that are not faced by the other financial institution regulators. Banks, by contrast with credit unions, may issue both equity and debt capital in public offerings and private placements for regulatory capital purposes and community banks may often avoid corporate-level income taxation by making a taxpayer-subsidized S corporation election under the Internal Revenue Code.]
- materially limit their customer base under the FCUA Field of Membership restrictions,
- restrict their commercial and corporate lending activity, and the generous fees generated thereby, under the FCUA Member Business Lending restrictions, and
- narrow their profitable investment activity under the FCUA investment authority restrictions.
In contrast, credit unions and the NCUA must operate strictly within, among others, these four statutory limitations in a fully accountable and transparent manner. Simply put, as a former tax attorney, if the credit union tax-exemption was of such value to community banks relative to the statutorily enacted competitive advantages granted to community banks (and denied to credit unions under the FCUA), it seems that many more community banks would have converted to credit union status a long time ago. That is, the quid pro quo for the credit union tax exemption imposes statutory restrictions on the ability of credit unions to raise regulatory capital and conduct their business operations in a manner parallel to that of banks.
13 To repeat, matters of federal taxation, together with the noted statutory restrictions and privileges, reside solely within the domain of Congress and not with the NCUA or any other financial institutions regulator.
14 In conducting any such analysis, one may reasonably inquire as to why many more community banks have not converted to a credit union charter if the credit union tax exemption is, indeed, of such value relative to the statutorily enacted competitive advantages and S corporation status afforded community banks. To me, as a former tax attorney, one answer appears more than a little ironic: Based upon an objective analysis of the applicable governing statutes and regulations, one could argue that the overall most favorable organizational structure for a de novo community financial institution is that of an S corporation electing community bank. After all, those institutions avoid corporate-level income taxation, together with the equity and debt capital, field of membership, member business lending, investment authority, and other statutory limitations applicable to credit unions. In addition, subject to the rules governing S corporation status, community banks may often compensate their board members, management, and employees with stock options and grants, a compensation structure that is not available to credit unions.
15 After representing the so-called money-center or too-big-to-fail banks for much of my legal career, teaching tax law at a law school and a business school, and serving as a member of the TARP Congressional Oversight Panel and the NCUA Board, it is apparent to me that credit unions and community banks are often materially different financial institutions with specifically tailored and targeted business models, operations, and ambitions. The overwhelming majority of these institutions – whether credit unions or community banks – are growing, thriving and prospering and have, from all indications based upon the facts before us today, little interest in changing the status of their organizational charter. If, on occasion, market forces and arm’s-length negotiations indicate that a merger or other business combination between a credit union and a community bank makes economic sense, the rules proposed at the NCUA January 2020 board meeting will assist both parties in negotiating, documenting and closing their transaction in a fully accountable and transparent manner.
17 An abbreviated sojourn through recent financial meltdowns includes the following:
- The S&L debacle in the late 1980s was triggered by an over-concentration of commercial real estate lending and a shortage of regulatory liquidity and capital.
- The leveraged buyout, or LBO, crisis that followed soon thereafter developed from an over-concentration of corporate lending and a shortage of regulatory liquidity and capital.
- The lesser-developed country, or LDC, crunch that hit the so-called money-center banks, arose from an over-concentration of sovereign debt lending and a shortage of regulatory liquidity and capital.
- The dot-com crisis that greeted us at the turn of the millennium developed, in part, from an over-concentration of tech lending and a shortage of regulatory liquidity and capital.
- The Financial Crisis of 2008/2009 that devastated Main Street and necessitated a gargantuan bailout of Wall Street was spawned by an over-concentration of dubiously underwritten and sketchily securitized residential real estate loans and a shortage of regulatory liquidity and capital.
18 Unfortunately, Main Street consumers took the brunt of the financial pain while Wall Street banks and related participants often escaped through a taxpayer-funded bailout under the rubric of too-big-to-fail.