A cohort of banking trade groups Monday called on the incoming Trump administration to pause all pending bank regulation and push back rules' effective dates to give incoming Trump regulators the time to assess pending rules and decide how to proceed.
The group letter — signed by the American Bankers Association and all 52 state bankers' associations — expressed their disapproval with a variety of regulations issued by the outgoing Biden regulators. The letter asked President-elect Trump to direct all financial agencies to pause work on all pending financial regulation and pending agency litigation upon taking office, and also asked that implementation dates on pending rules be extended to allow new agency premiers to review and reevaluate unfinished rulemakings.
"Over-regulation has created headwinds for banks, their customers, and our economy," they wrote. "The process of amending or withdrawing agency actions can be slow, but these are steps you can take on day one to prevent further harmful regulations from taking root."
The industry has launched a string of lawsuits challenging safety and soundness regulation issued by the Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and the Federal Reserve Board. In Monday's letter, the industry critiqued both what they call excessive prudential regulation as well as overzealous consumer protection efforts by the Consumer Financial Protection Bureau under Biden.
The bank groups also recommend the incoming Treasury secretary comprehensively review the cumulative impact of agency rules, including how they incentivize banks to engage or not engage in certain lending activities. Trump has nominated hedge fund manager Scott Bessent to serve as the next Treasury secretary.
House Republicans
Bank interest groups have a number of levers they can pull to reverse rules they dislike, beginning with persuading new agency heads to reverse or revise pending rules. The Basel III endgame capital rules are some of the most consequential and controversial unfinished regulations that could be pared back under new agency leadership.
The industry has also launched a number of lawsuits against Biden-era regulations, including a new set of implementation rules for the Community Reinvestment Act, a 1977 anti-redlining law. The industry argued that regulators exceeded their statutory authority with the new rules, which expand the scope of where regulators evaluate banks' lending for CRA compliance purposes. Under current rules, banks are assessed on how well they lend near their branch locations, whereas the new CRA rules would extend assessment areas into areas where banks do significant business.
The final CRA rule issued last year is the first such reform to the implementation rules since the 1990s. A federal judge in Texas has issued a preliminary injunction against enforcing the new rules pending the outcome of the banking groups' lawsuit.
For rules already finalized, however, a law allowing Congress to nullify executive agency regulations — known as the Congressional Review Act —
