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Tuesday, June 13, 2017

Treasury Department Issues Sweeping Regulatory Reform Recommendations

The Treasury Department has issued a 150-page report making dozens of recommendations for how Congress and regulatory agencies can streamline bank regulation in a way that promotes economic growth. The report came in response to President Trump’s executive order outlining core principles of financial regulation and calling for a comprehensive review of the regulatory structure.

As ABA has long urged, the report called for significant tailoring of regulatory requirements. “[N]early seven years after [Dodd-Frank], regulation has proven to be insufficiently tailored to depository institutions based on the size and complexity of their business models,” the report said. The report noted that economic growth and loan growth have been historically depressed during the current recovery, which Treasury attributed in part to the volume and structure of current regulations.

ABA President and CEO Rob Nichols said:
Today’s Treasury report is an important step to refine financial regulations to ensure that they are supporting – not inhibiting – economic expansion. We applaud Secretary Steven Mnuchin for recognizing that we need regulatory reform to boost economic growth, and we expect this report will serve as a catalyst in that effort.
ABA was an active participant in the Treasury’s process. It submitted 10 white papers to Treasury offering detailed feedback, and delegations of bankers representing all bank sizes took part in in-person meetings. The recommendations of the report are consistent to a large degree with recommendations made by ABA.

The Treasury report included recommendations on capital, liquidity, community banks, mortgage lending and structural regulatory reform. While some of Treasury’s recommendations require congressional action, Mnuchin estimated that “70 to 80%” can be put into motion by regulators immediately through their independent rulemaking authority. The report also highlighted numerous mortgage rules that the CFPB could address on its own.

Nichols will discuss the Treasury report, along with legislative efforts on regulatory reform and other topics during a free member webinar Thursday at 2 p.m. EDT. ABA staff will continue to review the report and issue additional analysis for members in the days to come.

Read the Treasury report.
View Treasury's summary of its recommendations highlighted to note ABA-supported ideas.
Register for the webinar.

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