WASHINGTON — The advent of Donald Trump as the front-runner for the Republican presidential nomination is forcing banks to take a harder look at the New York businessman and what he might mean for the industry if he wins the White House.
In a typical election year, most bankers support the Republican candidate. That was likely to be particularly true this year, given the industry's continuing anger over the Dodd-Frank Act and the desire for regulatory relief. But this is far from the typical election — and Trump is nothing like the typical nominee.
"A Trump nomination will scramble lines in lots of sectors … and that most certainly includes the financial services sector," said Larry Sabato, the director of the Center for Politics at the University of Virginia.
One big problem is that Trump has articulated nothing approaching a comprehensive plan when it comes to financial policy beyond vaguely criticizing Dodd-Frank.
"Trump is a wild card," said Camden Fine, president of the Independent Community Bankers of America. "I have no idea how he would view our issues."
Love him or hate him, Trump provokes strong reactions from much of the electorate, bankers included. His volatile temperament and penchant for showmanship have left many skeptical.
Howard Headlee, the head of the Utah Bankers Association, compared Trump to a loan applicant, suggesting bankers would be reluctant to approve him.
"My experience is that people who exude an overwhelming sense of confidence often do so to mask a fundamental deficit of trustworthiness," said Headlee, who said he is backing Sen. Marco Rubio, R-Fla., for the nomination. "Someone comes in with a lot of talk and not a solid plan, they don't do well in loan committee. Trump sets off a lot of triggers that people are going to have to wrestle with… He pushes all the buttons a bad loan pushes. He just screams bad loan."
At the same time, however, Trump hardly seems anti-bank. Indeed, he has years of experience working with banks as a real estate developer and has signaled that he supports less regulation.
"It's terrible," Trump told The Hill newspaper on Oct. 14. "Under Dodd-Frank, the regulators are running the banks. The bankers are petrified of the regulators. And the problem is that the banks aren't loaning money to people who will create jobs."
That attitude could be a positive for the industry if Trump were to win the presidency, some observers said.
"He has been hard on Wall Street, he gets the populist message, but at the same he has said that the regulators are running banks and all these new regulations are making banks afraid to lend. That seems to be his big focus — how do we get banks to lend again?" said Justin Schardin, associate director of the financial regulatory reform initiative at the Bipartisan Policy Center.
Lawrence Baxter, a professor of law at Duke University and former Wachovia banker, said Trump has more understanding of the banking system than some might expect.
"I don't buy the argument that because he does not have concrete policies that he would be a disaster," Baxter said. "You don't get to arrange large-scale loans on a repeated basis without becoming very familiar with how the banking system works."
Still, Trump plays by his own set of rules — and bankers like predictability. That may mean that, should Hillary Clinton win the Democratic nomination, many Wall Street bankers support her. They've already given millions to her campaign, suggesting they are comfortable with the former New York senator and secretary of state.
"They may disagree with Clinton and her policies, but they at least know her. There is more familiarity with her, especially with the heads of the firms," said Brian Gardner, an analyst at Keefe, Bruyette & Woods.
Although Clinton has said she would oppose any significant changes to Dodd-Frank, her banking plan is largely in favor of reforms "at the margins," Gardner said.
"The possibility for change under Trump is much greater," he added.
But Headlee is less certain how community bankers would line up.
"In a hypothetical matchup between Trump and Clinton, it's not clear who bankers will support," he said.
Whether Trump will be the Republican nominee will be clearer after Tuesday, when 12 states vote in primaries across the country. If Trump wins most of those races, he may be all but impossible for Rubio or Sen. Ted Cruz, R-Texas, to overtake in the competition for delegates, barring a major upset.
Trump was heavily criticized by rivals Rubio and Cruz during the debate on Feb. 25, who both mocked his lack of specifics on how he would tackle the country's problems. But Trump received a boost Friday after New Jersey Gov. Chris Christie, another former rival, endorsed him.
That endorsement underscores another area of intense interest for bankers — who Trump's advisers are on economic policy and who he would appoint if elected president.
"Trying to imagine what a Trump administration would do depends on the people he surrounds himself with," said Fine. "I don't think anybody knows who that would be."
Trump is a Washington outsider, and has mentioned only the activist investor Carl Icahn as a potential adviser on financial policy.
If elected, he will have an opportunity to make some critical appointments for bankers, including Treasury Secretary, the vice chairman of supervision for the Federal Reserve Board (a position that has been vacant since it was created in 2010).
"We don't know if he would pull from traditional Republican circles. My sense is he would be more likely to try and pull from the private sector," said Mark Calabria, director of financial regulation studies at the Cato Institute. "I don't think you will get people who are necessarily really hostile to Wall Street, but I don't think you will necessarily get establishment characters either."
Trump has based his reputation as a businessman on being a delegator and picking the right people for the right jobs.
"If he is going to be like Ronald Reagan and not have a finger on the pulse, he has got to do what Ronald Reagan did, and that is appoint people that know what they are doing and hold them accountable," Baxter said. "That is the chief executive model."
Baxter said Trump could bring in people from the private equity and leverage buyout world with whom he has become familiar in his business dealings. Such people could be more willing to think outside the box, exposing a "maverick side," he said.
"I am assuming we are dealing with very intelligent, financially savvy people that are willing to break the mold," Baxter said. "Maybe we need that now, because we don't have a good result now."