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48 YELLEN SHARES VIEWS ON DODD- FRANK, VOLCKER Janet Yellen, Chair of the Board of Governors of the Federal Reserve, recently completed the second day of her semi-annual testimony to the Senate and fielded questions from Congress members regarding housing, banking, and proposed regulatory reform. According to Sen. Mike Crapo (R-Idaho), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, Congress was prepared to discuss monetary policy, the SIFI threshold, stress testing, the Volcker Rule, and small bank capital rules. Yellen was indeed asked to convey her opinions on Dodd-Frank reforms and how she best thought to change the Volcker Rule. Some members of Congress, including Chairman Crapo, said they see these bills—and the $50 billion SIFI threshold—as arbitrary hurdles that make it difficult for smaller banks to do business. Many have suggested raising the threshold to an indexed $125 billion or removing a monetary threshold and concentrating on a business model- based regulatory approach. In response, Yellen said: "We've already said that we would favor some increase if Congress sticks with a dollar threshold that we would support some increase in the threshold," he said. "An approach that is based on business model or factors is also a workable approach from our point of view, conceivably. Some of the enhanced standards should apply to more firms with lower levels of assets and others with higher levels. I think that either type of approach is something we could work with." Yellen was also pressed about the Volcker Rule, which prohibits banks to make certain types of speculative investments, and whether or not she thought it worked. "e [Volker Rule's] goal is [one] in which I agree, and to permit market making," she said. "e implementation of it has been very complex and burdensome. We've suggested that community banks be exempt from it entirely. I wouldn't [completely] get rid of it. I believe the Treasury report suggests maintaining their restriction on proprietary trading and depository institutions. So, I wouldn't get rid of it, but I would look for ways to simplify it." Yellen did, however, agree with the committee's assessment that housing plays an important role in economic health. BANKS BUCK EXPECTATIONS, COME OUT ON TOP Many of the nation's banks are experiencing marked improvements. In fact, according to the Q2 earning reports from JPMorgan Chase, Wells Fargo, and Citigroup, all three surpassed expectations for this quarter's earnings. JPMorgan Chase reported a record quarter, which Fortune contributes to the Fed's three recent rate hikes. In terms of income, the bank's numbers rose to $1.82 per share, significantly higher than the expected earnings of $1.57 cents per share. Total revenue was over 4 percent above the forecast: $26.4 billion instead of $24.8 billion. Profits were up 13 percent to $7.03 billion. e bank elected to keep dividends at $0.50 per share, despite go-aheads for higher payouts after completing its recent stress test. Wells Fargo also reported higher-than- expected earnings for the second quarter, at $1.07 per share—$.05 above the expected $1.01 per share earnings and a 5 percent increase over the year. e organization's revenue report, however, did not live up to expectations, falling shy of the forecasted $22.5 billion and coming in at $22.2 billion. Citigroup reported greater numbers than expected in both revenue and price per share. While it was expected to report $1.21 per share earnings, the bank reported $1.28 per share—a $.05 increase since Q2 2016. It also reported a revenue of $17.9 billion, when it was only expected to report $17.3 billion. At time of press, Bank of America showed a -2.01 percent change, while Wells Fargo was down 1.93 percent. PNC's stock fell 1.20 percent, and Citigroup was down 0.88 percent. U.S. Bancorp took a hit as well, dropping 0.69 percent.

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