Banking regulations are likely to look a lot different once the Trump administration and Congress get finished rewriting them. The biggest change, though, will come not in legislation but perception.
In signaling an end to the post-financial crisis regulatory landscape, President Donald Trump on Friday sent a message that he was removing the black hats from the heads of Wall Street CEOs.
No profession has been vilified more over the past eight years, whether the hate came from Washington or Hollywood, which busied itself making a flurry of movies showing just how reckless Wall Street behavior was leading up to the crisis.
Now, Trump and the Republican majority are taking bankers out of the penalty box.
"Perhaps the biggest change for all financial services companies and professionals in 2017 is that the political narrative regarding financial regulation has shifted from a punitive focus with anti-business effects to a more traditionally conservative agenda focused on growth and jobs," Christopher Whalen, senior managing director at Kroll Bond Rating Agency, said in a report for clients.
The center of attention for those looking to roll back bank regulations is the Dodd-Frank reforms, passed after the crisis to avoid a repeat of the too-big-to-fail climate that required trillions in government bailouts. While the law helped restore bank capital levels, critics say it also inhibited bank lending and contributed to the meager economic gains during the recovery.
The main changes are likely to be in the way financial advisors work with clients, increasing the asset threshold for banks to undergo more intense regulatory scrutiny, and alterations to the Consumer Financial Protection Bureau, a post-crisis oversight body that has been hit with legal challenges over its structure.
But the overriding goal is to make banks a thriving part of the economy again.