Financial Regulation Under the Trump Administration
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Summary
President Donald J. Trump’s financial regulatory agenda is likely to include a mix of protectionist, consumer-focused priorities and deregulatory business-oriented rollbacks of Biden-era mandates. This is inferred through the ideological mix of populist and pro-growth economics that runs through the administration, including among Vice President JD Vance and Elon Musk respectively, and indeed Trump himself. However, the method by which protectionist, consumer-focused policies are negotiated and enforced is likely to be much different from the federal overreach of the past four years by agencies like the Consumer Financial Protection Bureau (CFPB).
A separate category exists wherein the regulations have a direct consumer impact—though not in a strictly financial sense—lending to what will likely be a more nuanced approach.
Examples
Consumer-Focused Financial Policies
- Credit Card Late Fees
- Credit Card Interest Rate Caps
- Bank Overdraft Fee Mandates
- “Junk Fees”
Business-Oriented Regulation
- Basel III Capital Requirements
- SEC Climate Disclosure Rule
Mixed Policy Areas
- Section 1033, or “Open Banking”
- Fair Access Laws and Debanking
How can financial institutions, businesses, and consumers expect the Trump administration to handle financial regulation?
On the consumer-focused financial policies front, it is likely that the Trump administration will implement a more populist-leaning agenda. Examples of such policies include many from the CFPB, such as the Credit Card Late Fee Rule, the Bank Overdraft Fee Rule, and the fight against so-called “junk fees.” Additionally, Trump verbalized at least one protectionist policy during his campaign with calls to cap credit card interest rates temporarily. However, unlike the Biden administration, which leveraged the heavy hand of the CFPB and other agencies, the Trump administration is far more likely to engage in negotiations, pressure campaigns, and public-private partnerships that encourage lower fees and rates organically, as opposed to forcibly reducing or banning fees by mandate.
Examples of top-level regulations during the Biden administration, both of which are yet to be implemented, include Basel III Capital Requirements and the Securities and Exchange Commission (SEC) Climate Disclosure Rule. Though these certainly have downstream effects on consumers, they are not strictly consumer-facing rules and thus less likely to fall under the populist ideological agenda. Trump has frequently discussed his intentions to deregulate and implement a pro-business, pro-growth agenda. Additionally, many ideologically left-wing mandates of the Biden era, a category under which the SEC Climate Rule certainly falls, have already been struck down. Therefore, in all likelihood, these regulations, mandates, and requirements will be abandoned altogether—though the method of doing so may vary, given the different regulatory bodies at play.
The final category of financial regulations described includes those that are consumer facing but not strictly financial. Explained differently, though they directly impact the consumer, they do not directly and obviously hit the pocketbook of the American populace. These regulations include rules like Section 1033, also called the Open Banking Rule, and federal fair access and “debanking” laws. Open banking has a less clear ideological pathway and could reasonably be either negotiated or abandoned.
Trump discussed debanking in remarks to the World Economic Forum in Davos and made clear he intends to deal with the matter. In either regard, these issues are unlikely to be mandated strictly through executive force.
Conclusion
The Trump administration’s mixed ideological components leave questions about its financial regulatory agenda. Overall, it is reasonable to conclude that financial regulation will not be strictly free market, nor strictly economic populism. Instead, a “mixed bag” is likely. The particulars can be inferred logically when viewing the regulations through the lens of consumer-focused versus top-level deregulatory issues.
To learn more about financial regulation, please read our analysis on the issue.