Reg relief may have to get in line behind other issues: Trump official

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WASHINGTON — A Trump administration official struck a bearish tone Wednesday on the prospects for a financial regulatory relief bill, saying that it may need to wait in line behind other policy initiatives.

The narrowly tailored bill negotiated between Senate Banking Committee Chairman Mike Crapo, R-Idaho, and moderate Democrats was approved by the panel last month and financial services lobbyists have been hopeful that the bill could see vote on the Senate floor by February.

The bill would raise the Dodd-Frank Act asset threshold to be considered a “systemically important financial institution” from $50 billion to $250 billion and make a number of other reforms beneficial to community and midsize banks, including changes to the stress testing regime, the Volcker Rule and mortgage lending.

But Mark Calabria, chief economist for Vice President Mike Pence and a well-known D.C. policy expert, said passage of the bill could be delayed as policymakers deal with more pressing issues. In his remarks, he was also skeptical about regulators trying to stabilize cryptocurrency prices, and discussed the change in tone at the Consumer Financial Protection Bureau under new leadership.

“The reality is, where is it going to be in the queue and will [Congress] get to it before” the midterm elections, Calabria said of the regulatory relief bill in remarks to the Exchequer Club, a Washington group that meets to discuss financial policy issues. He later told reporters that he saw the bill's odds of passing before the elections as less than 50%.

He noted that the bill “should have bipartisan support” and said "the only reason I think anyone could have a problem with the Crapo bill is it doesn’t go far enough.” But among the factors that could cause a delay, he said, are budget deadlines that the administration is juggling and efforts to pass an infrastructure bill.

Calabria was also asked whether the Treasury or the Federal Reserve Board should try to bolster cryptocurrency asset prices in light of their recent drop in values.

“I am fairly skeptical of an approach that suggests the Federal Reserve should put a floor on any asset price,” he said.

However, he said that cryptocurrencies will likely have a role to play in the financial system, particularly outside the U.S. where payment systems aren’t as well-developed.

Calabria said that he personally does not have any financial stability concerns about the volatile price fluctuations but he noted that the Securities and Exchange Commission and the Commodity Futures Trading Commission are taking a closer look at the issue. He said he believes that the SEC and CFTC should be the primary regulators of cryptocurrencies.

Calabria also took a jab at former CFPB Director Richard Cordray, whom some Republicans and some in the industry accused of not following the Administrative Procedure Act, and the legislative intent of Congress, when issuing regulations and instead charting his own course. Calabria said the CFPB will be less partisan, and more predictable under new leadership.

“You will see a CFPB that issues rules, takes comments, [and] reads the Administrative Procedure Act,” he said. “More consumer protection, less social engineering and staying consistent with what the statue actually says.”

However, he said despite fears by some consumer advocates, the Trump administration does not plan to dismantle the agency. The CFPB is “here to stay,” he said.

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Regulatory relief Cryptocurrencies Regulatory reform CFPB