What Happens to all the Pending Bank Regulation When President-elect Trump is Sworn In

11/13/24

Soon after President-elect Trump takes the oath of office on January 20^th his chief of staff will send a memo to the heads of all the regulatory agencies instructing them to pause all pending regulation. If the rule is simply a proposed rule, they are instructed to stop all work on finalizing the rule. If the rule is final but not published in the federal register, (the final step before it is implemented) they are instructed not to publish. Essentially, the new administration will order all regulators to put their pencils down until new heads of agencies are appointed. There are several pending pieces of regulation that could be caught in limbo between the two administrations. Including Basel III Capital Standards for the Largest Institutions, Reg II Interchange Proposal, CFPB Overdraft proposal, Fair Credit Reporting Act Medical Debt exemption, the FDIC's Board Governance proposal, and Brokered Deposit proposed rule.

The regulatory changes do not stop with just those that are pending. The new heads of the reg agencies will have the ability to revisit all rules promulgated but will likely take a close look at the recently enacted Community Reinvestment Rules, Section 1071 small business data collection rule, CFPB credit card late fees rule, Section 1033 Open Banking rule, and the recently finalized bank merger guidelines, and all CFPB Guidance is reversable by the stroke of a pen.

Due to recent court cases clarifying the ability of the President to appoint and fire the head of the CFPB and FHFA, we can expect President-elect Trump to appoint a new CFPB Director, Comptroller of the Currency, and Federal Housing Finance Agency Director as soon as he takes office. Chairman Gruenberg of the FDIC's term is not technically up though he has signaled he will step down as Chairman once his successor has been confirmed by the Senate. At the moment, we do not know how the election results and a Republican lead Senate might have changed those plans. The Federal Reserve does not have a seat up until January 2026 so we do not expect any immediate changes at that agency.