What Trump's return to the White House means for the financial services sector

President-elect Trump's return to the White House will no doubt bring significant changes to the financial services industry, as he rolls back many of the Biden administration's policies. 

While some of Trump's agenda will be familiar from his first term, he added some planks to his platform during the last campaign that have already begun to reshape parts of the sector.

Erin Bryan, a partner at law firm Dorsey & Whitney and former in-house senior corporate counsel for one of the largest banks in the U.S., shared with FOX Business what lies ahead for the industry over the next four years.

For starters, Bryan says that when it comes to banking and financial services policy, the second Trump administration will likely resume its efforts to limit banking regulations. 

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The attorney, whose regulatory compliance practice advises clients on anti-money laundering laws, electronic banking, financial technology, government examination and privacy, noted that over the past four years, banks have experienced a surge of new regulations and enforcement activity.

"The Biden administration’s rulemaking has continued at a strong pace despite the Supreme Court’s recent decisions limiting the powers of the administrative state," Bryan said, referencing the overturning of the Chevron doctrine over the summer. "The industry is likely to see swift action to scale back the Biden administration’s rulemaking efforts given the new administration’s expressions of concern regarding over-regulation."

Bryan said that when President Trump returns to office, he will find a vastly different landscape than before, and because federal agencies have been severely impacted by recent Supreme Court decisions – including the end of Chevron – actions to drop pending rulemaking could have wide-ranging and long-lasting consequences.

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The second Trump Administration is also likely to take a friendly approach to bank-fintech partnerships, bank merger proposals, bank charter applications, and blockchain technologies, all of which encountered resistance over the past four years, she noted.

Trump's embrace of cryptocurrencies has already been seen in the market in the days since he won the election a week ago. Bitcoin has hit repeated record-highs, which Bryan told FOX Business is directly related to investor expectations following the election results.

She pointed to Trump sending strong signals during his campaign that his administration would embrace cryptocurrencies. 

For example, he launched crypto business World Liberty Financial, accepted campaign donations in the form of digital currencies, said he would make the U.S. the world’s "crypto capital," and even discussed the possibility of creating a bitcoin strategic reserve.

Regulatory agencies that oversee the financial services sector are bracing for an upheaval under the new Trump administration.

"Leadership changes at the [Consumer Financial Protection Bureau] CFPB will almost certainly be made in short order," Bryan said. "This will give President Trump an opportunity not only to course-correct the rulemaking and enforcement agendas of the CFPB and [Office of the Comptroller of Currency] OCC, but also to gain two Republican votes on the FDIC [Federal Deposit Insurance Corporation] board."

Bryan says all current rulemaking and policy proposals from the CFPB and FDIC are at risk of being placed on hold or abandoned altogether by the Trump administration, including everything from the open banking rule to guidance on overdraft fees to brokered deposits.

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But one arena where Trump’s options are limited is with the Federal Reserve.

Current leadership, including Fed Chair Jerome Powell and Vice Chair for Supervision Michael Barr, can only be replaced for cause. 

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"Still, if President Trump gains control of both the FDIC and OCC, the Federal Reserve’s joint agency proposals could face new roadblocks," Bryan said. "It’s nearly impossible to imagine that new appointees who will be charged with implementing the president’s anti-regulation agenda would support the current Basel III endgame proposal."