By Pete Schroeder and Chris Prentice
WASHINGTON/NEW YORK (Reuters) -The banking and financial industries are quickly drawing up wish lists for lighter regulation under the incoming administration of President Donald Trump, as Wall Street sees an opportunity to influence policy.
Numerous financial trade groups are working on detailed lists to be provided to Trump’s transition team, according to four industry sources who asked not to be identified.
That follows weeks of outreach by Trump’s team to industry groups, lawyers and lobbyists as they prepare for a possible return to the White House in 2025, according to three sources familiar with the efforts. Some trade groups want to deliver the wish lists urgently, two sources said.
The speed at which the transition team and industry are moving to identify potential regulatory relief underlines how aggressively the new administration could move.
After Trump’s resounding victory on Tuesday, that effort has accelerated, with Trump allies asking industry players to detail what government problems they have and how to solve them.
Trump’s transition team did not respond to a request for comment.
REQUESTS FROM THE BANKING INDUSTRY
The banking industry is keen to see the next administration step back from the numerous controversial regulatory projects, especially the proposed Basel III endgame rules, which would require big banks to hold much more capital to reduce risks. Banking groups have pressured regulators for months to drastically curtail these plans and expect the next administration to start over or revamp the current product, three industry sources said.
will also likely seek relief from the fair lending rules they are battling in court, easier-to-navigate annual stress tests for big banks and a lighter review of bank mergers, three of the sources said.
Major U.S. lenders prefer to stay within the Basel framework of international banking standards but are seeking looser capital requirements that they believe still comply with the rules, said two sources familiar with the banks’ lobbying efforts who did not want to be identified as discussions are still ongoing. in motion.
The Consumer Financial Protection Bureau, which under Director Rohit Chopra has strengthened enforcement actions against banks, is another area of focus.
Trump appointees are expected to suspend CFPB rules on credit card fees, open banking and so-called junk fees, according to an industry representative, who declined to be identified because the talks are private.
The CFPB did not immediately respond to a request for comment.
Banks and the broader financial industry will be closely watching efforts to write tax legislation in Congress, as many provisions of a 2017 tax law that Trump passed in his first term are set to expire. One of the industry’s top priorities will be maintaining lower corporate tax rates.
The private fund industry is focused on easing an aggressive agenda from the Securities and Exchange Commission and preserving the tax treatment of carried interest so that it continues to be taxed as capital gains and not ordinary income, according to a person familiar with the matter. is on the case. .
“The reforms implemented over the past three and a half years will increase efficiency, competition and investor protection in U.S. capital markets,” a spokesperson said. “The agency’s enforcement actions have held violators accountable and returned billions to harmed investors.”
The four industry sources said Trump’s team’s efforts are already more robust and detailed than in 2016, signaling a more organized and efficient effort to build out the new administration. In addition to seeking policy recommendations, industry representatives say they have also been asked for input on potential high-level appointees to lead banking and financial regulators.
However, industry sources noted that after Trump is sworn in on Jan. 20, it could be several weeks or months before some new regulators are installed, as the Senate is likely to first consider higher-level Cabinet picks, two of the people.
One of the items on the list from the Alternative Investment Management Association, which represents $3 trillion in hedge funds and private credit funds, is more dialogue between industry participants and regulators.
Private funds have challenged the SEC over its regulations and scored a major victory this year when a U.S. appeals court in June overturned a key SEC rule that imposed stricter supervision on them. A court decision is still pending in the other cases.
“I foresee a return to traditional regulation with that proactive engagement, where there is not an adversarial relationship with a majority of the community of market participants,” said Daniel Austin, head of U.S. market policy and regulation at AIMA.
