“Properly structuring regulation of the U.S. financial system is critical to achieve the administration’s goal of sustained economic growth and to create opportunities for all Americans to benefit from a stronger economy,” said U.S. Treasury Secretary Steven T. Mnuchin. “We are focused on encouraging a market environment where consumers have more choices, access to capital and safe loan products–while ensuring taxpayer-funded bailouts are truly a thing of the past.”
Over the past four months, Secretary Mnuchin and other Treasury officials met with hundreds of stakeholders across the financial ecosystem, including community, independent, regional and large banks, regulators, FSOC members, consumer advocates, academics, analysts and investors. These listening sessions provided a very clear picture of redundancy, fragmentation, and inefficiency in regulatory framework.
“We congratulate the House on passing the Financial CHOICE Act,” said Mnuchin. “The report we are releasing focuses on solutions the Executive Branch can execute through regulatory changes and executive actions. We look forward to working on a parallel track with Congress to provide swift relief, particularly to community banks.”
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A Financial System That Creates Economic Opportunities: Banks and Credit Unions” detailed the following findings:
►The Consumer Financial Protection Bureau must be reformed
►Community financial institutions–banks and credit unions–are critically important to serve many Americans
►Capital, liquidity and leverage rules can be simplified to increase the flow of credit
►Improving market liquidity is critical for the U.S. economy
►Regulations need to be better tailored, more efficient, and effective
►Congress should review the organization and mandates of the independent banking regulators to improve accountability
“The CFPB was created to pursue an important mission, but its unaccountable structure and unduly broad regulatory powers have led to predictable regulatory abuses and excesses,” said a Treasury statement. “The CFPB’s approach to rulemaking and enforcement has hindered consumer access to credit, limited innovation, and imposed unduly high compliance burdens, particularly on small institutions.”
Among the recommendations by the Treasury regarding CFPB revamping include:
►Making the Director of the CFPB removable at will by the President or, alternatively, restructuring the CFPB as an independent multi-member commission or board;
►Funding the CFPB through the annual appropriations process;
►Adopting reforms to ensure that regulated entities have adequate notice of CFPB interpretations of law before subjecting them to enforcement actions; and
►Curbing abuses in investigations and enforcement actions.
