The first of the Treasury Department reports ordered by President Trump on overhauling financial regulations will come out Monday evening and feature relief for community banks and credit unions, Secretary Steven Mnuchin suggested Monday.
“These banks are not what created the financial crisis,” Mnuchin said during a hearing before the House Appropriations Committee Monday. “These banks know how to lend in the community, they know how to make loans, they know the people in the community — these banks fuel the engine of growth in this economy, which is small and medium-size companies.”
Monday night’s report will be the first of four issued in response to Trump’s February executive order, Mnuchin said, and the “overarching theme” will be community banks versus the eight megabanks that he said control half of assets.
The report will also include a call to empower the Financial Stability Oversight Council, the super-group of financial regulators chaired by Mnuchin that was created in the wake of the crisis, to address overlapping responsibilities of different agencies. Additionally, Mnuchin said, he was calling for a review of the Community Reinvestment Act to make sure that bank efforts to help underserved areas actually help those places. “In too many cases, this money is not properly going to the community,” he said.
The report will contain a “long list” of specific recommendations for easing regulatory burdens, he said. Of those, the vast majority will be aimed at regulators rather than at lawmakers.
The Trump administration’s efforts to overhaul the rules imposed on the financial system are proceeding through the council of financial regulators that he heads, Mnuchin noted.
The administration also supports the Financial Choice Act, the Dodd-Frank replacement bill that passed the House last week, but won’t rely on it.
“We support Chairman Hensarling’s Choice Act,” Mnuchin said, “but what we were primarily focused on was: What are the things we can do to unlock burdensome regulations and overlapping regulations.”