WASHINGTON — The busy legislative agenda laid out by President Trump in the State of the Union speech Tuesday night casts doubt on how quickly Congress can move on financial services legislation, particularly a housing finance reform package.

The president’s speech included calls for Congress to enact immigration reform, as well as spending for infrastructure investment and the military, without mention of core policy issues of interest to the financial services industry.

Trump touted his administration’s steps to ease regulations across industries, but steered clear of a pending bill that would provide targeted relief for banks from provisions of the Dodd-Frank Act.

President Trump gestures while delivering the State of the Union address.
"In our drive to make Washington accountable, we have eliminated more regulations in our first year than any administration in history," said President Trump in the State of the Union address. Bloomberg News

Lawmakers interviewed after the speech said they still expect the Senate to pass the regulatory relief bill, which was negotiated by Banking Committee Chairman Mike Crapo, R-Idaho, and has bipartisan support. But they were less optimistic that a plan for reforming the government-sponsored enterprises Fannie Mae and Freddie Mac will take shape this year, despite legislative talks on housing finance reform picking up steam.

“I am concerned about the amount of legislative time this year to tackle it in the way that it should be,” Rep. French Hill, R-Ark., a member of the House Financial Services Committee, said of GSE reform.

Rep. Steve Pearce, R-N.M., also a member of the House committee, said some of the recent legislative victories for the GOP congressional leadership and Trump administration bring regulatory relief closer to the top of the agenda.

“The tax bill was the first piece of that. Reopening the government and holding steady was the second piece, and it is going to make it easier to pass some of these other reforms, like the Dodd-Frank reforms,” Pearce said. “The Senate feels pretty confident they are going to get a major piece of legislation through, [and] we can do it in the House if they can get it done it the Senate.”

But he added that Dodd-Frank reform will likely come after a push for an immigration overhaul. On GSE reform, Pearce said, “That is a little bit longer shot.”

Trump called for $1.5 trillion in new infrastructure investment. “Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private-sector investment — to permanently fix the infrastructure deficit,” Trump said.

In a statement following the speech, Financial Services Roundtable CEO Tim Pawlenty indicated the industry’s support for infrastructure improvement, but still seemed to favor regulatory reforms and housing finance as priorities.

“The president's focus on economic growth and expanding opportunity for more Americans is vitally important for America," Pawlenty said. “Tax reform is already positively affecting communities across the country, but more work can be done to move us forward. The banking and payments industry will be a constructive partner to push regulatory modernization, housing finance reform and infrastructure financing across the finish line.”

Trump touted a booming economy, crediting his deregulatory agenda and the recent passage of a tax reform bill.

“In our drive to make Washington accountable, we have eliminated more regulations in our first year than any administration in history,” Trump said.

The administration is expected to keep its foot on the gas pedal when it comes to rolling back regulations, making Republicans optimistic that a Dodd-Frank rollback can gain momentum.

Hill said a debate on immigration reform will likely take place “before we have the freedom to go to the Senate floor with additional priories for the president.”

“But I would not be surprised if [Senate Majority Leader Mitch] McConnell scheduled floor time on Senator Crapo’s bill rather than [in] the distant future.”

Others said GSE reform should be higher on the agenda.

“That would be a monumental mistake” not to get GSE reform done, said Rep. Emanuel Cleaver, D-Mo., the top Democrat on the housing and insurance subcommittee.

Sen. Chris Van Hollen, D-Md., a member of the Senate Banking Committee, agreed. “The system needs reform, but we also don’t want to do anything that has unintended consequences,” he said.

Cleaver said he favored some reforms to Dodd-Frank, but cautioned about going too far.

“Some regulatory relief is always appropriate, because when our agencies draw up rules, sometimes they make errors. But to just say carte blanche and knock down rules, I think, is dangerous not only to the financial services industry but to America,” Cleaver said.

“When the economy is booming like this we are all going to be happy, but to keep in mind that also means there is a recession down the road. We know that because they are cyclical.”