Trump's first year

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It has been a year since President Trump took office, and while Dodd-Frank has not been repealed, his Administration has already had a wide ranging impact on financial industry regulation. In contrast to other headline-grabbing priorities such as healthcare, immigration, and tax reform, the Administration’s actions on financial services have largely fallen under the radar. This is due in part to the fact that, as we anticipated last November, the Trump Administration departed from the anti-bank populism espoused during the campaign and quickly moved on to more traditional Republican drives to (a) reduce “excess” regulation on financial institutions and the financial system, and (b) spur economic growth by streamlining and stabilizing capital requirements, enabling banks to lend and grow with greater certainty. 

While most in the industry have acknowledged that post-crisis reforms were necessary, many have felt that the Dodd-Frank Act went too far and too quickly, without adequately considering the relative costs and benefits of its requirements. In the new referees, the industry sees an acknowledgment of that sentiment and a promise that regulations will be right-sized and streamlined. If the recent bank earnings results and stock market growth are any indication, the industry is satisfied so far. Not only have tax cuts passed and interest rates risen, but they are also aware that while the regulatory load will be lightened, the core framework of rules that have become crucial to risk management and global competitiveness are here to stay. Below are our top ten observations of impacts to financial regulation after President Trump's first year in office: 

  1. Treasury reports are specific blueprints for change.
  2. New bank regulators making an impact on environment and outlook. 
  3. CFPB in retreat. 
  4. CFTC and SEC to streamline and coordinate (finally).
  5. Bipartisan relief for small- and medium-sized banks a near certainty in 2018.
  6. End of non-bank SIFIs – rules are for big banks, not insurers and asset managers.
  7. Enforcement actions on the decline.
  8. New focus on good governance.
  9. CCAR and resolution planning out of the headlines and into BAU.
  10. Cybersecurity & AML to headline 2018 risks. 

First take

A publication of PwC's financial services regulatory practice

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Julien Courbe

Financial Services Leader, PwC US

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