The Trump administration has laid out its plan for overhauling banking rules, calling on the government to ease, though not eliminate, many of the restrictions that were imposed on Wall Street after the financial crisis. Joining us is Nathan Dean, government analysts for Bloomberg Intelligence. Nathan, what are some of the
most important parts of the plan? So, I think the most important part of the plan is the recognition that Treasury knows that they can roll back dot frank via the regulatory process, and they highlight this report was only for the depository institutions, so it talked about things like capital requirements, the vocal rule. But what the report laid out was is that you know, we can gut or we can you know, tweak a lot of dot frank via the regulatory process, and we can do it without
Congress's input. And so I think it's a great blueprint. It can show the path of dot frank. But you know, just just remember that it takes the financial regulators to actually implement this, and that's going to take a lot of time. So tell us some of the major rules that it's aim debt. So this report really put in great detail a lot about capital requirements and liquidity requirements. So uh, it called for the next stable funding ratio
proposal to be indefinitely delayed. It changed called for changes to how the liquidity coverage ratio is put in place, all these big bank capital requirements. You know, in the United States, there's a lot of banks. There's eight banks that are considered g SIPs uh, and they have this additional g SIP surcharge. And so the Treasury reports said that we're going to ask the regulators to look into this. Now,
we expect those rules to be tweaked over time. But you know what, one one thing the report didn't do is it just said didn't get it. Didn't say just get rid of the rules. And so this was a very measured and I think reasonable approach to how they're going to tackle dot frank. But again that the downside to the report is it's going to take years to implement all this. How is it different from the bill
passed by the House Republicans last week? So the bill that was passed last week is the House Finitial This is the Financial Choice Act. It was the kitchen Sink bill. Uh. You know, this was the one that gut dot frank and so there are a lot of elements in here that the Democrats just won't go with, and that's why this bill is dead on arrival when it goes to
the Senate. This report said, okay, fine, so we're gonna keep dot Frank as it is, but we're gonna look at the regulations that have been put in place under dot Frank, and we're gonna ask the regulatory agencies, which by mid two thousand eighteen are gonna be under Donald Trump's influence. We're gonna ask the regulators to look at these regulations and begin tweaking things to make it a
little bit better. You know, a lot of the financial services industry has been coming out and saying, don't repeal dot Frank, just tweak it, make things a little bit better. Obviously, there are some big points in here where the banks just want to get rid of the rule, and that's where they would prefer. But this Treasury report essentially was something that both the big banks and the small banks like. Uh. And so it's it's something that I think the industry
expects to happen. It's just gonna take a lot of time. Democrats who say that Dodd Frank is vital for Wall Street to be kept in check. Criticize the report, do they have a point? Well, you know there they criticize the report, and I think they're going to continue to criticize the report. But you know, about two thirds about this report, you know they can do without Congress's input.
And so if i'm you know, we put out a note to our clients this morning saying that, you know, if we expect the Democrats to actually begin negotiating over dot Frank, maybe not this year, but maybe next year, because you know, if I'm at the Consumer Financial Protection Bureau and Richard Cordray leaves and Donald Trump puts his own person in place, they can do a lot of damage to the CFBB and there's nothing the Democrats can
do to stop this. So, you know, this report could be an incentive for the Democrats to begin negotiations, you know. And Senator Mike Crepo is chairman of the Ranking or the chairman of the Senate Banking Committee, a Republican even just told Bloomberg News a couple of minutes ago that, uh, this is a great starting point, but they're gonna have their own legislation out sometime this fall. That's the legislation we're telling our clients to look at because the Democrats
probably will start negotiating on it. You mentioned how long it's going to take. Let's go into that a little bit longer because there are scores of regulations that would have to be rewritten, and it's a long process not only to rewrite but also getting them approved. Talk about the process. Yeah, so there's really three things to point out. The first stuff that we expect from the regulators are changes to compliance. There's these things called no action letters,
interpretive guidance more on the technical side. That's something the regulators can do fairly quickly. If you're a compliance officer, this is what you care about. The regulation still remains on the books. Next thing is changing the actual regulation. Regulators have to follow the Administrative Procedures Act. They have to put out a proposal, they have to have a common period, they have to have a cost benefit analysis.
The quickest I've ever seen done is nine months. The third thing to put in play is that you know the Federal Reserve, and Janet Allen remains in at the FED until February of two thousand eighteen. The Federal Reserve is so much involved in a lot of these big bank rules. So if I'm at the Vocal rule, for example, and it's a five agency rule o CC, FED, fd A, C, SEC, c FDC, you really need the Fed on your side
to you know, change the vocal rule. And if Janet Allen says no, uh, you know, it could be pushed out to mid two thousand eighteen. You have to with through the Administrative Procedures Act. It could be before the change regulation actually begins to impact the banks. Nathan about thirty seconds. How much pushback do you expect from consumer advocates? Well, I think the consumer advocates are going to continue to push back. Um, you know, this Treasury report is the
long term game. So I think a lot of their focus is going to be on the Senate. You know, this Senate bill that's expected this fall. That's where a lot of the action is going to be. Because the quickest thing to do anything in terms of rolling back Dot Frank, it's an Act of Congress. So I would expect the consumer advocates to spend most of their time up on the hill and on the whole. How do you how do you view this this these rules favorable
to banks? The report definitely is favorable to banks. I think this is something that they've been wanting for a while. It's the first time we've seen a policy statement that says, you know, we've heard from the banking industry. There's a lot of banks that provided input to this report. UH, and I think this is something that the banks have said, you know, this is the first time a policymaker has actually hurt our concerns. UH and somewhat agree with us.
All Right, thank you for being on Bloomberg Law. That's Nathan Dean, government analyst for Bloomberg Intelligence.