Press Releases

Today, the House Committee on Financial Services, led by Chairman French Hill (AR-02), hosted Treasury Secretary Scott Bessent for a hearing entitled, “The Annual Report of the Financial Stability Oversight Council.”

On Community Banks:

Chairman Hill questioned Secretary Bessent on the importance of community banks, to which the Secretary responded, “It’s Main Street’s turn, and essential for Main Street having its turn are the small and community banks. And I would note that, thanks to onerous regulation, and as you and I both say, community and small banks became too small to succeed. Tragically, more than 50% of community banks have disappeared since the great financial crisis. Not during, since, there have been virtually no de novo banks created, whereas before the GFC, there were more than 50 per year. And small, community banks not only are the anchor for community-based lending, but they provide the bulk of the lending for agriculture, for small real estate loans, and for small business loans. So, a thriving community bank infrastructure and ecosystem is essential.”

On the Main Street Capital Access Act:

Rep. Roger Williams (TX-25) said, “Two of my bills are included in our committee's Main Street Act. The first, the Merger Process Review Act directs the Inspector General of the NCUA and Federal Banking Agency to examine the Agency's merger review process to evaluate delay reduction, efficiency, and transparency. The second, the Merchant Banking Modernization Act, would permit banks to hold merchant banking investments for up to 15 years, providing regulatory certainty and aligning federal investment rules with real world timelines of small and medium sized business projects that often take more than a decade to plan.”

 Financial Institutions Subcommittee Chairman Andy Barr (KY-06) said, “I agree with you that economic stagnation is itself a threat to financial stability. That's why we're pushing this Main Street Access to Capital bill, which will provide for more de novo charters of community banks, the TIER act, the Community Bank Regulatory Tailoring Act, which would modernize these statutory thresholds to remove the static nature of the thresholds and allow for more diversity and growth in financial institutions.”

On Modernizing Regulation:

Rep. Barry Loudermilk (GA-11) said, “… banks need to be focused on their BSA reporting, or they need to focus their BSA programs on real illicit finance risk, and that focus on higher value activities would also better serve our law enforcement and national security objectives. A few weeks ago, we had a markup in this committee and passed my bill, the Financial Reporting Threshold Modernization Act, that would responsibly raise the CTR and SAR thresholds while ensuring these reports are still useful for law enforcement.”

Rep. William Timmons (SC-04) said, “While there has been progress on tailoring supervision, far less has been done to modernize regulatory tailoring itself, particularly the interagency thresholds that trigger enhanced prudential standards for category two through four banks. Those thresholds were set years ago and have not been updated to reflect inflation, economic growth, or changes in the financial system. As a result, banks that were never intended to be treated like G-SIBs are increasingly subject to requirements that do not match their risk profiles.”

On the INVEST Act:

Capital Markets Subcommittee Chairman Ann Wagner (MO-02) said, “Main Street businesses across the Midwest and other regions of our country are overlooked, as venture funding and capital raising opportunities remain largely concentrated on the coasts. That is why I have made it a priority to facilitate capital formation and empower entrepreneurs and small businesses across America. Just weeks ago, Mr. Secretary, December 11th to be exact, the house passed my INVEST Act, a bipartisan package of 22 bills focused on three goals: expanding access to capital for small businesses, increasing opportunities for everyday investors and strengthening our public markets. Capital formation is the lifeblood of American economic growth and prosperity. Our capital markets are indeed the deepest and most liquid in the world, and the INVEST Act will ensure that they remain among the greatest strengths for decades to come.”

Secretary Bessent Echoed the Work of the Committee:

Treasury Secretary Bessent said, “In calibrating regulations, federal agencies must avoid the temptation to create a zero-risk financial system, which would result in what others have called, ‘the stability of the graveyard.’ FSOC should aim to identify vulnerabilities that could lead to systemic crises and encourage the private sector to mitigate those risks before recommending additional regulation. FSOC should also work with its members to support efforts to avoid or pare back existing regulation that stifles pro-growth lending, capital formation, and innovation. And the best way to achieve these goals is by centering economic growth and economic security at the heart of FSOC’s agenda. Promoting economic growth and economic security is essential to ensuring financial stability. Economic growth strengthens household, business, and financial-institution balance sheets, creating capital buffers that reduce the risk of defaults and financial stress. And economic security reinforces domestic production capacity, raising living standards while reducing vulnerability to external shocks and supply-chain disruptions.”

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