Bankers asking Trump to pause recent regulations

Consumer watchdog agencies like the CFPB have imposed new rules on banks and the bankers don't like it; they want Trump to roll back the clock. Image (c) ConsumerAffairs

Consumer watchdog agencies have imposed new rules on banks

The Consumer Financial Protection Bureau (CFPB) has been issuing a spate of new regulations in advance of the inauguration of President-elect Trump. Now the American Bankers Association (ABA) has responded, with a letter urging Trump to pause all new regulations affecting banks and extend the deadlines for regulations that have already been finalized.

In the letter, they argue that this pause is needed to give the new administration's teams time to review and understand years of rules, guidance, and policies that they say have limited the ability of banks to respond to market changes.

“A new, commonsense approach to financial regulation is urgently needed, and that process can begin quickly by announcing an immediate regulatory pause and review,” the bankers said.

They also recommend that the Treasury Department conduct a comprehensive review of regulations under the Biden Administration, focusing on their impact on access to credit and capital markets.

CFPB actions have included:

  • tougher scrutiny of overdraft and NSF fees;
  • a medical debt rule that prohibits including medical debt in credit ratings;
  • suing banks for fraud on Zelle;
  • cracking down on student loan refinancing, servicing and debt collection; and
  • closed a loophole that exempted overdraft loans from lending laws.

The banking associations argue that recent regulatory actions have hurt the ability of banks to provide credit and capital.

They contended that for the past several years, “the federal banking agencies, the Consumer Financial Protection Bureau (CFPB), and the capital markets regulators have pursued an aggressive and misguided regulatory agenda, upending longstanding, tested banking practices with questionable and unnecessary policy actions that undermine our members’ ability to provide capital and credit to Main Street.”