Financial Services

President-elect Donald Trump’s 2024 policy agenda for financial services will endeavor to balance the interests of working-class voters and consumers while pursuing deregulation, supporting innovation in financial technology, and revisiting policies from his previous administration. Here are the key priorities:

Deregulation by the Banking Agencies: While few specifics have been provided, Trump has signaled his intent to pursue a deregulatory agenda for the banking sector. The federal banking agencies, including the Federal Reserve Board of Governors (Fed), Federal Deposit Insurance Corp. (FDIC), and Office of the Comptroller of the Currency (OCC), together implement bank-capital regulations known as the Basel III Endgame and have proposed a rule to do so. Opponents of the proposal have raised concerns that if this rule is finalized, it would further constrain lending activity by US banks. Other banking regulations proposed that have met with opposition include a proposal related to interchange fees charged by debit-card issuers, and a proposal related to brokered deposits. If these rules are finalized before President-elect Trump assumes office, the next Congress (under Republican control in both chambers) could nullify these rules under the Congressional Review Act.  The lookback period for rules eligible under the CRA for nullification is estimated to be August 1, 2024 and after. Policy statements and guidance by the banking agencies related to bank mergers also might be reversed, possibly leading to more bank mergers.

Changes to the Consumer Financial Protection Bureau (CFPB): The CFPB has issued proposals or finalized rules addressing overdraft loans and related fees; use of data related to medical-care debt; data sharing by depository and non-depository institutions with certain third parties; and credit-card late fees within the last year. The data-sharing rule would be subject to the CRA discussed above. While these initiatives have all faced some industry opposition, it is unclear how a Trump 2.0 Administration will consider them.

Capital Markets Regulation – Securities Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC): The SEC under Trump 2.0 could have a particularly active agenda. The SEC’s final rules related to proxy advisors, climate disclosures, private-fund advisors rule, and the agency’s treatment of digital assets have been the subject of lawsuits brought against the SEC. Absent new congressional authority, the Trump 2.0 SEC could stop defending these lawsuits regarding finalized rules and eventually vacate or revise those rules. Similarly, the SEC could change its supervisory and enforcement approach related to the crypto industry by only bringing cases against those clearly engaged in fraudulent conduct. At the CFTC, the agenda is less clear but could include revisiting a rule proposal on event contracts that sought to prohibit options related to political elections. If Congress passes legislation authorizing additional authority to the SEC and CFTC related to the trading of crypto assets, both agencies would embark on rulemakings to implement any new authority.   

Support for Financial Technology and Cryptocurrency: In recent years, federal banking agencies have pursued supervisory programs that have made it difficult for companies to secure certain banking charters (e.g., the OCC) or partner with Banking as a Service (BaaS) providers. President-elect Trump has signaled his support for crypto, which could translate into more banking charters for crypto-native companies. This and a more permissive supervisory approach to bank partnerships with BaaS providers, combined with greater permissiveness for bank mergers, could collectively lead to the expansion of the fintech and crypto sectors. 

Trump’s financial services policy agenda is largely focused on deregulation, promoting innovation, and reducing federal oversight. While this approach aims to stimulate economic growth and expand access to capital, it also raises concerns about potential risks to financial stability and consumer protections. The effectiveness of these policies will depend on the balance between fostering innovation and maintaining safeguards against financial abuses.