Exclusive: US Treasury to talk with insurance regulators about private mortgage lenders, sources say

WASHINGTON, March 29 (Reuters) – The U.S. Treasury Department is expected to meet in the coming weeks for the first of a series of meetings with domestic and international insurance regulators on the latest developments in jittery credit markets, two sources familiar with the plans told Reuters.

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Sources said Treasury Secretary Scott Bessent had been planning since January, however, to begin regular and sustained discussions with insurance regulators in the second quarter of this year.

The first meetings could be announced as soon as Wednesday, sources said.

Based on the results of the meeting, the participants will decide the direction of the future negotiations, with the aim of improving the fact-based, transparent supervision of private lenders as their interactions with regulated financial institutions increase.

The Treasury does not have direct regulatory authority over the insurance industry but Bessent will seek to make the department a “unifying regulator, resource and forum” for all 50 US government insurance regulators.

Treasury officials are eager to hear the authorities’ views on the increased use of the fund position, the standardization of private debt standards, the use of foreign reinsurance, and the collapse of investment in the private debt markets, the sources said, adding that any policy orders would come only after a series of discussions.

A spokesman for the US Treasury Department did not immediately respond to a request for comment.

During remarks at the Economic Club of Dallas in February, Bessent, a former hedge fund manager, said that when assets move from private lenders to regulated financial institutions, such as pension funds, banks or foreclosed insurance companies, “Treasury steps in.”

“I’m concerned about watching, how this gets to the regulated financial system,” Bessent said.

He added that private mortgage lenders helped close the funding gap when regulators tightened bank controls after the 2008-2009 financial crisis and when bank loans collapsed during the COVID-19 pandemic, but he wanted to make sure private mortgage lenders “were prudent in their credit facilities.”

“We want to measure, can it have any effects on the economy as a whole? So far, it has been very additive, but also, how does it affect the regulated system? And we want to prevent contagion.”

Besent said that individual investors in pension or 401 (k) pension accounts should be able to take advantage of private debt assets, but gave a warning that the Treasury Department was part of the process to control how private assets are transferred to individual accounts.

He said the Trump administration will not allow Americans’ savings and investment accounts to become a “dumping ground” for “rotten” assets.

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