One of the financial initiatives Trump has called for-- reinstating the Glass-Steagall separation between bank lending and securities underwriting -- would need congressional backing. But Wall Street has been befuddled by Trump’s bashing of rules, while pushing for a regulation that would completely change the banking industry. And bringing back Glass-Steagall hasn’t traditionally been a policy Republicans support.
“It’s time for a 21st Century Glass-Steagall,” Trump says on his website. That phrase, a “21st Century Glass-Steagall Act,” also happens to be the actual title of the bill pushed by one of his chief antagonists: Warren, a Democratic senator from Massachusetts.
Though she might favor a new Glass-Steagall, Warren’s prized Consumer Financial Protection Bureau could be on very shaky ground. Created by Dodd-Frank, the CFPB has toughened oversight of mortgage lending and credit cards. It was among agencies that fined Wells Fargo $185 million for opening up scores of accounts without customers’ approval.
“I would look at the CFPB as an area of focus,” said Isaac Boltansky, an analyst at Compass Point Research & Trading LLC in Washington. Trump would have the power to fire Director Richard Cordray on his first day in office, Boltansky said.
Banks Unprepared
“No one is prepared for a Trump presidency,” said Tony Fratto, a former assistant Treasury secretary in President George W. Bush’s administration who now works for banking clients as a partner at Hamilton Place Strategies. More pointedly, he added that Trump’s presidency will bring so many problems that a question like “Who is named SEC chair?” doesn’t matter as much.
“We’ll be putting a monster in the White House,” Fratto said.
This article was provided by Bloomberg News.