Secretary of the Treasury Scott Bessent addressed Arizona bankers in Phoenix, highlighting their crucial role in both economic growth and national security, particularly in combating illicit financial activities linked to border issues.
Bessent emphasized that community banks, despite holding only 15 percent of industry assets, provide 40 percent of small-business loans. He criticized post-Great Financial Crisis regulations, stating that Dodd-Frank, intended to end “too big to fail,” instead created “too small to succeed,” leading to the disappearance of half of community and small banks.
The Secretary underscored the unique vulnerability of Arizona to “aftershocks of Biden’s border crisis,” including cartels and criminal organizations that seek to conceal illicit proceeds. He detailed President Trump's administration's resolve to safeguard the financial system, citing an Executive Order directing Treasury and regulators to protect against fraud and improve the detection of illicit financial activity.
In response, Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an advisory in June to help institutions identify schemes involving unlawful employment, labor brokers, shell companies, and other forms of financial exploitation. The Office of the Comptroller of the Currency (OCC) reinforced this with new guidance on lending to borrowers not legally authorized to work in the United States, focusing on sound underwriting practices.
Bessent clarified that bankers are not asked to assume border enforcement burdens but are depended upon to “know your customers, identify risks as they arise, and report suspicious patterns.” He concluded by stating that this partnership involves Treasury providing better tools and listening to community bankers, ensuring a fortified financial system.