WASHINGTON—During his recent confirmation hearing, Treasury Secretary nominee Scott Bessent called for less regulation on banks and criticized credit card companies, the ABA Banking Journal reported, noting Bessent did not take a stance on Trump's pledge to cap credit card interest rates at 10%.
He also expressed his support for community development financial institutions.
Bessent appeared before the Senate Finance Committee to field questions on a range of topics. Asked about his views on the banking sector, Bessent said the “depth and breadth” of the sector was a strength for the U.S. economy, although he expressed concern that five large banks have “too big a share of banking assets,” and that overregulation was driving consumers to the unregulated “shadow banking” sector, ABA Banking Journal said.
Banking regulation is best seen as a pendulum that can “overshoot” in one direction, according to Bessent. The regulatory scheme from 1999 to the 2008 banking crisis represented one “overshoot,” but since then it has overshot in the opposite direction, he said, according to the ABA Banking Journal report.
“Since then our banking system has been constrained and if we are going to have the kind of generalized Main Street prosperity that I would like to see over the next few years, it is going to be driven by communities, small banks and small regionals,” he said.
Pressed by committee member Sen. Bernie Sanders (I-Vt.) on Trump’s proposed cap on credit card rates, Bessent said many credit card companies “have been bad actors throughout history.” However, he did not say whether he would endorse the 10% cap, only that he would support Trump’s decision on the matter, ABA Banking Journal noted.