Cotton: U.S. Companies Should Not Be Pressured to Adopt Global Regulations

Sen. Tom Cotton (R., Ark.) questioned Treasury Secretary Steve Mnuchin on Tuesday about U.S. control of its own financial regulation and said the government should not cede its power to foreign bodies.

Cotton mentioned a letter he wrote with fellow members of the Senate Banking Committee raising concerns about the Financial Security Board (FSB), an international body he suspects of exerting undue pressure on American firms.

"We’re concerned that it’s morphed into a kind of global regulatory body using its peer-review mechanism as a quasi-enforcement tool to pressure U.S. companies into adopting global standards," Cotton said about the FSB. "I’m concerned about that kind of regulatory creep into U.S. jurisdictions, especially considering how dissimilar our financial markets are from any foreign markets. For example, we have thousands of small lenders, we have independent asset managers, and we have an insurance industry regulated by our states primarily."

He then asked Mnuchin whether FSB regulations were voluntary or binding, and Mnuchin said they were voluntary. Mnuchin went onto affirm that U.S. regulators have the final say.

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