The Treasury Department shortly will issue recommendations on how to better tailor regulations for community banks, Secretary Steven Mnuchin told the Senate Banking Committee Thursday.
“We have taken a systematic approach in our work by meeting with a variety of stakeholder groups to hear what works, what does not work, and what can be improved,” Mnuchin said, during testimony before the committee. “Our initial report will contain recommendations to provide relief for community banks and make regulations more efficient, effective and appropriately tailored.”
It is unclear what impact those recommendations may have on credit unions, since, during more than two hour of testimony, Mnuchin never mentioned credit unions.
At one point, Mnuchin said that report may be issued within the next few weeks, but was not more specific than that. And he said that report will be followed up with others recommending further changes to the financial regulatory regime.
Mnuchin said Treasury officials have met with a variety of stakeholders and credit union trade groups have said they have met with Mnuchin and others.
However, Democrats said they were concerned that Treasury officials have not met with consumer groups.
In opening the hearings, Senate Banking Committee Chairman Mike Crapo (R-Id.) said he hopes Congress can remove a “one-size-fits all” regulatory regime for community banks and credit unions.
But Senate Banking ranking Democrat Sherrod Brown (D-Ohio) accused Mnuchin and Republicans of forgetting the lessons that should have been learned as a result of the last economic crisis. For example, he said, the administration is threatening the CFPB.
The House Financial Services Committee has approved Chairman Jeb Hensarling’s Financial CHOICE Act, which would make large-scale changes to the Dodd-Frank regulatory regime. Crapo and Brown have said they want to work on a bipartisan basis to craft Dodd-Frank changes.
During the hearing, Sen. Robert Menendez (D-N.Y.) criticized the administration for proposing to kill the Community Development Financial Institutions program, adding that the administration did not even accurately describe the program in budget documents.
Mnuchin said that while he shares some of Menendez’s concerns, the administration had to “make difficult decisions” in finding the cuts needed to fund a large increase in defense spending.
Mnuchin generated some confusion when he said that while the administration supports a “21st Century Glass-Steagall Act,” it does not support the separation of commercial banking from investment banking.
Sen. Elizabeth Warren (D-Mass.) said that’s exactly what Glass-Steagall did, concluding, “This is just bizarre.”
