President Donald Trump, with Secretary of Treasury Steven Mnuchin, displays a signed financial services Executive Order during a ceremony in the US Treasury Department building on April 21. | Getty Treasury won't push to gut post-crisis bank rules, report will show

The Treasury Department on Monday is set to propose modest revisions to banking regulations put in place after the financial crisis, a sharp contrast to the slash-and-burn approach to those rules that was approved by House Republicans just this week.

In a long-awaited report ordered by President Donald Trump, Treasury will call for a streamlining of regulators’ authority and for shrinking the power of the popular consumer watchdog agency created by the 2010 Dodd-Frank Act, according to people familiar with the document.


The report is one of a series that the department is drafting in response to a February executive order by Trump for a comprehensive review of financial regulations, which he says are hindering U.S. economic growth. Along with the House bill — which did not win a single Democratic vote — the report will frame the debate for the Senate as it takes up the issue.

Yet the differences in the two approaches are likely to spark a clash of ideas between an administration stocked with former Wall Street executives and conservative House Republicans, who are calling for more sweeping changes.

Treasury's document is probably closer to what is achievable, given that Senate Republicans will need Democratic votes to pass most major legislation.

In multiple places, the roughly 160-page report will outline problems that require more study as opposed to specific solutions, the people said, while taking a clearer position in some areas where there is greater consensus within Congress and among regulators.

It takes a calibrated, vague approach to the so-called Volcker rule, one of the most hotly contested parts of the Dodd-Frank law, which bans banks from making risky bets with deposits. Lenders complain that the regulation, named for former Federal Reserve Chairman Paul Volcker, is burdensome and difficult to comply with.

Treasury will recommend that banks with fewer than $10 billion in assets be exempt from the Volcker rule, the people said, while the House bill, known as the Financial CHOICE Act, would repeal the rule entirely.

The Dodd-Frank law requires banks with more than $50 billion in assets to face stricter scrutiny, a threshold that many in the industry say unfairly lumps in smaller regional banks with mega-lenders.. The department advocates changing that threshold, though it is unclear about exactly how to do that. The Financial CHOICE Act, passed by the House on Thursday, proposes a significant unwinding of the Dodd-Frank Act, one of President Barack Obama's signature achievements.

At the heart of the legislation is a trade-off in which a bank would be able to opt out of many regulations if it agreed to significantly boost its level of capital.

Both the House bill and the Treasury report seek to pare back the authority of the Consumer Financial Protection Bureau, with the department calling for removal of that agency’s authority to directly examine banks, according to sources. But the House bill would eliminate most of the power of the bureau, which was created by Elizabeth Warren and has returned billions of dollars to consumers.

The Treasury report will not substantively address the government’s power to unwind failing banks, an authority that the House bill would scrap entirely, sources said. So-called orderly liquidation authority is the subject of a separate report, also mandated by Trump, due in October. It also will not delve into Trump’s calls for a “21st century Glass-Steagall,” a reference to the Depression-era law that prevented companies from engaging in both commercial and investment banking to minimize risks to depositors.

But public statements by administration officials indicate they aren't seeking to reinstate that law, leaving unclear what exactly the phrase means.