A number of sources offer guidance to readers concerning developments in financial regulation that could occur during the president-elect's coming administration. Those sources include (i) the Donald J. Trump website, (ii) the 2016 Republican platform and (iii) the proposed CHOICE Act, which the Republican House introduced, and the House Financial Services Committee voted to support, before the election.

Certain webpages on the Trump site are relevant to financial services, including those that concern Trade, Tax, Regulations (the webpage offers a general statement on regulatory philosophy) and Energy. Those webpages contain statements that are relevant to financial services and trade without focusing specifically on those areas. The discussion of energy is probably the most concrete.

The Republican Platform 2016 includes a general statement on economic philosophy (at page 1), a section on natural resources, such as energy (at page 17), and a section on government reform (at page 23). The first section emphasizes the value of free markets, and offers general criticisms of Dodd-Frank (as establishing "unprecedented government control over the nation's financial markets . . . [with] consequences [that] have been bad for everyone except federal regulators"), and specific criticisms of Dodd-Frank's effect on community banks, and of the "dictatorial powers" it grants to the Director of the CFPB. In the platform, Republicans assert that the established Federal Reserve Board monetary policy is the result of "political pressures for easy money and loose credit" and not "sound economic principles and sound money." The section on government reform and other parts of the platform express the view that the costs of regulation are bad for the economy:

Over-regulation is the quiet tyranny of the "Nanny State." It hamstrings American businesses and hobbles economic growth. The Great Recession may be over, but in the experience of most Americans, the economy is still sick. The federal regulatory burden has been a major contributor to that stagnation.

The proposed CHOICE Act offers the most detailed statement on financial services. The preamble establishes a position against big banks and big government. The tenets of the proposal are as follows:

  • provide a simpler system of capital regulation for certain banking entities;
  • eliminate the Financial Stability Oversight Council's authority to designate institutions as "systemically significant," and impose further restrictions on the "bailout" of financial institutions;
  • reorganize the Consumer Financial Protection Bureau ("CFPB") to be led by a five-person commission, in the style of the SEC and CFTC, and limit some of its authority;
  • reform the regulatory process by subjecting the financial regulatory agencies to certain rulemaking requirements that apply to other agencies, including requirements for preparing and submitting cost-benefit analyses;
  • impose greater penalties on Wall Street for crimes involving deceit;
  • adopt measures like those in the JOBS Act in order to facilitate capital-raising by small businesses; and
  • reintroduce a number of prior Republican proposals that were intended to reduce the costs of financial regulation.

Commentary

In the days to come, Cadwalader will follow developments in regulation closely. Topics that we expect to address will include specific proposals, changes in regulatory staffing, actions with respect to Executive Orders, and the status of regulatory proposals that have not been adopted.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.