House Financial Services Chairman French Hill previews Treasury testimony, backs Kevin Warsh and calls Powell probe a "distraction"

Chairman French Hill, who leads the House Financial Services Committee, told a television host that Treasury Secretary Scott Bessette would testify before the committee and urged federal policymakers to "tailor" bank regulation so smaller community banks face lower compliance costs.

Why it matters: The remarks link the committee's oversight agenda to two immediate goals: shaping bank supervision and supporting housing supply. Hill framed regulatory relief for small banks and new capital availability as a way to increase homebuilding and small-business lending across the country, while also addressing high-profile oversight of the Federal Reserve.

Hill said the administration's confirmations at bank supervisory agencies have allowed regulators and policymakers to pursue "tailoring," arguing that "we don't lump all banks in the same regulatory space." He cited the Main Street Capital Access Act as a legislative vehicle that, in his view, would "free up community banks particularly to have more loans and capital available for small businesses, farmers, and home building." (Chairman French Hill)

On housing affordability, Hill told the host it was important to "remove regulatory barriers to supply," citing local zoning and other costs and urging use of federal tools such as CDBG to promote construction. He said reducing federal and local regulatory burdens, combined with more capital for home construction, could increase housing supply without necessarily eroding existing homeowners' equity.

The segment also turned to recent questions about Fed Chair Jerome "Jay" Powell's testimony and the confirmation of Kevin Warsh. Hill described the probe as "certainly a distraction to the president getting the confirmation for his choice, Kevin Warsh," and said, "I think Kevin is as imminently qualified" to serve, citing Warsh's market and governance experience. He added, "I don't think Jay Powell testified and committed perjury" during the Senate Banking Committee hearing and said a Department of Justice review of Fed-submitted materials could serve as an "off ramp" if it concluded no criminal perjury occurred.

Hill said both the House Financial Services Committee and the Senate Banking Committee have been seeking documents related to a Fed construction project and cost overruns and that congressional oversight into those matters is ongoing. He declined to predict whether Powell would remain as an FRB governor after Warsh's confirmation, saying Powell "will have to come to that conclusion" in the months ahead.

What happens next: Hill said Treasury testimony and continued oversight of Fed matters are on the committee's near-term docket. He said the timing and outcome of Warsh's confirmation could hinge on whether related investigations are resolved in the coming months.

Quotes used in this article are taken from the interview transcript and attributed to the speakers who appear in the recording.