In early June, the Treasury Department issued a 150-page report that included more than several, in fact, dozens of proposals and suggestions related to how the federal government through its regulatory agencies, with Congress leading the way, may better regulate the banking industry so that such governance and supervision promotes economic growth.
After President Trump issued an executive order detailing his administration’s core principles of financial regulation and requesting a complete review of the federal government’s current regulatory structure, the Treasury Department went to work and issued the report in June.
Included in the report was a focus on the better tailoring of regulatory requirements to banks based on the size and complexity of the depository institutions’ business models. The report stated that one reason for depressed loan and economic growth was the volume and structure of current regulations.
Rob Nichols, president of the American Bankers Association (ABA), an organization which had urged reforms in the regulations and was an active participant in the Treasury’s study, stated “Today’s Treasury report is an important step to refine financial regulations to ensure that they are supporting — not inhibiting — economic expansion…we need regulatory reform to boost economic growth, and we expect this report will serve as a catalyst in that effort.”
Delegations of bankers representing all bank sizes also provided feedback, yet the report’s proposals are primarily consistent with the ABA’s recommendations. As a means to regulations that are better tailored to the needs of the depositary institutions, the report recommended significantly streamlining the stress test process and raising the stress test asset threshold from $10 billion to $50 billion, while allowing exemptions for some banks with over $50 billion in assets.
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