FSR Submits Recommendations to Modernize Financial Regulations

In response to the Trump Administration’s Executive Order directing the Treasury Department to conduct an assessment of financial regulation, the Financial Services Roundtable (FSR) submitted a letter outlining major recommendations to help grow the economy and create jobs.

“Improving the financial regulatory system, while protecting consumers, will grow the economy and expand opportunity for more Americans,” says FSR CEO Tim Pawlenty.

FSR’s Recommendations for Aligning Financial Regulation with Core Principles outline both executive actions and legislative actions that could be undertaken with three goals in mind:

• Enhancing policy coordination among federal financial regulatory agencies;
• Focusing supervisory and enforcement policies and practices on material risks to promote financial stability and economic growth; and
• Modernizing financial laws and regulations.

Among its recommendations, the FSR suggests the Administration should support policies that will promote retirement savings and enable financial services providers to better meet the long-term needs of Americans in their retirement years.

The letter says the Administration should:

• Oppose the implementation of the Department of Labor’s (DOL) current fiduciary rule and work to replace that rule with a “best interests standard” adopted by the Securities and Exchange Commission (SEC) and state insurance regulators;
• Treasury should support overhauling the techniques for assessing the “cost” of tax expenditures to reflect a realistic view of the benefits of retirement incentives that extend well beyond the customary five- or ten-year budget window; and
• Grant the private-sector authority to establish open multiple employer plans (MEPs) for small businesses.

The FSR also recommends the Administration should establish a more rational, integrated cybersecurity framework that would advance the mutual interests of government and industry in protecting and defending cyber space. “FSR urges all federal and state regulators to harmonize their cybersecurity compliance approaches to determine rigorous and appropriate levels of preventative measures an institution should establish and maintain, while still maintaining flexibility for each agency’s unique statutory authority and areas of focus and oversight,” FSR says.