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Treasury Secretary Mnuchin Testifies at Senate Bank Committee Hearing

Mon, Jun 5, 2017

21st Century Glass-Steagall

During a Senate Banking Committee hearing last Thursday, U.S. Treasury Secretary Mnuchin distanced the Trump Administration from a full reinstatement of Glass-Steagall, saying the Administration would support only a “21st Century” version that separates commercial and investment banking, but not a mandatory breakup of the biggest banks.

This is seen as a watering down of the prior Trump position that was interpreted as favoring a new law that actually separated banking institutions, and not simply the activities in which they engage. 

The original Glass-Steagall Act of 1933 separated investment and commercial banking activities.

Mnuchin did not elaborate on which aspects of Glass-Steagall the administration supports as part of the 21st century version. 

Regulatory Relief

Treasury Secretary Mnuchin also told the Senate Banking Committee that he is likely to recommend that financial institutions under $10 billion in assets be exempted from certain supervisory requirements under the 2010 Dodd-Frank law.

Committee staff after the hearing said it was their understanding that Mnuchin would make this recommendation as part of his first regulatory relief report in mid-June.  Staff also said that the Secretary would not specify which rules would be included, and suggested that details would be forthcoming in the report.   

The Administration issued an Executive Order in January mandating all regulators conduct a top-to-bottom review of their rules, and produce a list of duplicative, burdensome or unnecessary rules within 180 days.