Treasury Department Takes Lead in Efforts to Ease Banking Regulation

The Treasury Department is reportedly taking the lead in the Trump Administration’s efforts to streamline oversight and ease regulation in the banking sector.

Treasury Secretary Scott Bessent has been holding private meetings with bank agencies over the past month, Bloomberg reported Thursday (April 17).

Bessent has met with Federal Reserve Governor Michelle Bowman, Federal Deposit Insurance Corp.(FDIC) Acting Chairman Travis Hill and Office of the Comptroller of the Currency (OCC) Acting Comptroller Rodney Hood, according to the report.

While there were earlier media reports that administration officials were considering consolidating the duties of bank regulators, Bessent has said the agencies will work in concert, per the report.

Bessent and the Treasury Department are likely to focus on the process for determining large banks’ stress capital buffers, actions that have “unduly burdened” community lenders and a bank-capital proposal, the report said.

It was reported March 24 that the Treasury Department was drafting recommendations that would streamline the OCC and the FDIC and give the Department more control over them after concluding that those regulators probably cannot be merged without congressional approval.

Gaining more control over the other banking regulators would also help Treasury reduce the independence of the Federal Reserve when it comes to bank supervision by enabling Treasury to take the lead on multiagency laws that affect the country’s largest banks.

On March 6, it was reported that Bessent said that his department would work to see that financial regulators focus on material financial risks; that he agreed with the banking industry that federal regulators’ bank supervision is opaque, subjective and needlessly restrictive; and that he would not consolidate the federal banking agencies.

“We need our financial regulators singing in unison from the same song sheet,” Bessent said. “To be clear, this does not mean consolidation of agencies, but coordination via Treasury, such that our regulators work in parallel with each other and the industry.”

On March 2, the Treasury Department said in a press release that it will not enforce the Corporate Transparency Act’s penalties and fines associated with the beneficial ownership information reporting rule.

“Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy,” Bessent said in the release.