French Hill promises Republican-led bank deregulation

Al Drago/Bloomberg

WASHINGTON — House Financial Services Committee Chairman French Hill, R-Ark., highlighted Republican-controlled Washington's plans for a bank deregulation, even as President Donald Trump's tariff policy continued to whipsaw markets, at a conference hosted by the American Bankers Association. 

Bankers haven't fared well in market turmoil brought on by Trump's sweeping tariff announcement and in the escalations from China and hints at negotiations from other countries that've followed. Although the tariffs don't target financials in particular, a recession caused by expansive trade restrictions and increased cost of doing business abroad would be uniformly bad for most depository institutions. 

Bankers have also grown more worried about stablecoin legislation that Hill is helping shepherd through Congress. ABA, whose president and CEO Rob Nichols interviewed Hill onstage Tuesday morning, wrote to the committee highlighting concerns that the stablecoin legislation would help nonbank stablecoin issuers disintermediate banks' deposit taking. 

Hill, to the roughly 1,400 bankers who gathered or listened in to his comments, stressed that the deregulation that Republicans have pushed for in the banking system is coming. Hill is one of the Republican party's best envoys to the banking community as he, a former community banker himself, has long engaged with the industry and pushed for measures that banks of all sizes say would benefit them. 

He talked about one of the bankers' priorities — addressing the compliance burden of Dodd-Frank 1071, the small business data collection rule. 

"The opposition political party on this just doesn't understand the fundamental cost of making a small business loan, how each one is unique, how the credit underwriting is complicated and not straightforward," he said, to applause. 

Hill also talked about his efforts concerning the Consumer Financial Protection Bureau, although he didn't address the Trump administration's dismantling of the agency, which is currently the subject of a contentious court case and a preliminary injunction that prevents acting Director Russell Vought and other Trump administration officials from pursuing mass layoffs and contract terminations that would make it impossible for the bureau to perform its statutorily required duties. 

"We will be using a combination of budget reconciliation to limit the spending and scope of the CFPB to the extent we can with the parliamentary guidance that we get, as well as using our legislative authorities to get it on appropriations and have a bipartisan commission that oversees it," Hill said. 

Nichols asked Hill to "provide a little assurance" that stablecoins and the laws that govern it are not going to "supplant banking." 

Hill said the goal is to give banks and other financial companies "rules of the road" in how they handle digital assets. 

"We're trying to set up rules where a bank or a nonbank could issue a payment stablecoin for use on the blockchain, and in the community banking space, this may well be something that you're doing with a correspondent, you're doing with a bank service corporation provider, or you may do it yourself, or you may find that no customers have an application," Hill said. "It doesn't make any difference to me whether you think it's something you want to participate in or not, what makes a big difference to us really is we have to set out the rules."