Mnuchin: Administration Seeking Growth through Tax Reform, Reg Relief

Testifying before the Senate Banking Committee today, Treasury Secretary Steven Mnuchin said he is hoping to collaborate with senators on financial regulatory relief and housing finance reform. “This committee has done extensive work on [housing finance reform] along with your work on community financial institution regulatory relief,” he said. “I look forward to working with the Congress to develop a solution.”

The Treasury Department will soon release its first report responding to President Trump’s executive order outlining principles for regulatory reform, which Mnuchin said will include “recommendations to provide relief for community banks and make regulations more efficient, effective and appropriately tailored.” He added that a likely recommendation would be an exemption from the Dodd-Frank Act supervisory requirements for banks with less than $10 billion in assets.

Regarding the nation’s largest banks, Mnuchin noted that “I do not believe that any [bank] is ‘too big to fail,’” and signaled that the administration is not in favor of breaking up large banks or returning to the Glass-Steagall Act’s separation of commercial and investment banking. Such a return could create significant issues for financial markets, liquidity and the economy, he said.

The administration will also continue moving forward with its tax reform plan as it pursues economic growth, Mnuchin said, adding that he believes a goal of 3 percent GDP or higher economic growth is achievable. “It is our goal to bring meaningful relief to middle income Americans and make American businesses competitive again. We will do this all while simplifying the system.”

In addition to tax reform and reg relief efforts, the administration will also ramp up its efforts on housing finance reform in the second half of the year, Mnuchin said. He committed to working with lawmakers on both sides of the aisle to find a workable solution for Fannie Mae and Freddie Mac, create greater liquidity in the housing market and minimize taxpayer risk.