Trump rollback of banking regulation well under way
washington — President Donald Trump’s promised rollback of banking regulation is well underway, with vacancies at the top of key agencies and new legislation in the works.
Since the start of his presidency, Trump has decried the financial rules and regulations put in place to combat the excesses that led to the financial crisis through the DoddFrank Wall Street reform legislation of 2010.
“We expect to be cutting a lot out of Dodd-Frank because, frankly, I have so many people, friends of mine, that have nice businesses that can’t borrow money,” he said in February.
And Trump will have an unprecedented opportunity in coming months to reshape the agencies in charge of regulation, as he fills key positions.
At the Federal Reserve, which has a central role in regulating banks, he will have the opportunity to fill at least three of the seven seats on the central bank’s board. He recently named a successor for Fed chair Janet Yellen, tapping former investment banker and current Fed Governor Jerome Powell.
In the latest critical development, Richard Cordray, the first director of the Consumer Financial Protection Bureau (CFPB) who had long been in the banking industry’s crosshairs, announced last week he would step down by the end of the month, several months early.
The Senate also last week confirmed Joseph Otting, a banking executive and associate of Treasury Secretary Steven Mnuchin, with decades at major commercial lenders, as the new head of the Treasury’s Office of the Comptroller of the Currency, a principal banking regulator.
Likewise, the Securities and Exchange Commission, a markets regulator that polices Wall Street’s biggest banks, is now led by a Trump appointee.
Senior SEC officials have signalled this year they may shift away from the aggressive prosecutorial approach of the previous administration and early signs are that enforcement activity, particularly for financial institutions, has fallen.
Even as these personnel changes remain in the future, the industry already is experiencing a “different tone” and an “industry-friendly approach” from government, according to Wayne Abernathy, a senior executive at the American Bankers Association. In an interview, Abernathy said he expected the Fed under Powell to move more quickly down the path already forged by Yellen.