Mnuchin Offers Details on Regional Banks, But Avoids Nonbank SIFIs

Treasury Secretary nominee Steven Mnuchin expressed support for a more tailored regulatory regime for regional banks in responses he provided to a Senate committee.

Regulators should rethink whether banks that engage in “traditional” banking activities should fall under the same rules as the country’s “most complex financial institutions,” Mnuchin, a former regional bank chief executive, wrote in response to questions from the Senate Finance Committee obtained by a Senate aide and reviewed Tuesday by Morning Consult.

If confirmed to be the next treasury secretary, Mnuchin would chair the Financial Stability Oversight Council, a panel of regulators created by the 2010 Dodd-Frank financial law.

Regional banks cheered Mnuchin’s remarks, which echo their push for a more holistic approach to regulate lenders of their size. Industry leaders, who object to the $50 billion asset threshold at which banks are subject to stricter oversight, say regional banks don’t engage in the same high-risk activities of large Wall Street firms.

Fed regulatory czar Daniel Tarullo has indicated openness to easing restrictions on mid-sized banks.

Mnuchin stayed silent on whether FSOC should consider nonbank companies systemically important. “If confirmed, I look forward to working with FSOC and understanding the work that they have done on this issue before reaching a judgment,” he wrote. He also said he supported a “comprehensive review” of FSOC’s powers.