DEREGULATION DRIVE: US BANK REGULATION IN 2025
Of all the general elections that took place across the world in 2024 (voters in more than 60 countries went to the polls), few would argue against the US ballot having the starkest reverberations.
Both domestically and globally, the reaction to Donald Trump’s second presidency was generally a mixture of hopes and fears, with the new president’s stance on banking regulatory matters one of the targets of conjecture.
With the transition to a new administration now complete, forecasts regarding the regulation of banks and financial institutions (FIs) remain difficult to calculate due to the conflicting priorities of Trump’s populist rhetoric on the one hand and his strong preference for a deregulatory agenda on the other.
The consensus, however, is that bank regulation in 2025 will shift toward a deregulation agenda over a second Trump term – a view infused by the likelihood of a significant turnover at bank regulatory agencies. “Senior administration officials have indicated that several banking agencies might be merged into one,” says Joseph Lynyak, a partner at Dorsey & Whitney LLP. “But those constituencies will strongly oppose any real effort to do so.
“Republican officials also propose to eliminate the Consumer Financial Protection Bureau (CFPB),” he continues. “However, the Republican Senate majority lacks the 60 votes necessary to eliminate the CFPB, which argues strongly that any changes to the CFPB will occur as a result of changes to senior management and not to the CFPB’s statutory authorisation. In the alternative, however, the administration could de facto limit the effectiveness of the CFPB by severely limiting its current supervisory and enforcement authority over both banks and non-banks.”
Apr-Jun 2025 Issue
Fraser Tennant