WASHINGTON — Banks eager for regulatory relief may have to wait for other big-ticket items to be tackled by the new administration first.
In President Trump’s first joint address to Congress, he listed several top priorities, including repealing Obamacare and enacting tax reform, but no mention of reforming the Dodd-Frank Act.
Instead, he broadly pledged to spur faster economic growth.
“To accomplish our goals at home and abroad, we must restart the engine of the American economy,” said Trump, who added that he will not settle for minor victories. “The time for small thinking is over.”
Yet there was some good news for financial services executives in some of Trump’s call to action, including on health care reform.
“Tonight, I am also calling on this Congress to repeal and replace Obamacare, with reforms that expand choice, increase access, lower costs, and at the same time, provide better health care,” Trump said.
He added that reform should include more health savings accounts, which may provide some opportunities for certain banks and insurance firms.
Many bankers also support Trump’s call for tax reform, which could not only benefit them but could also increase domestic loan growth.
“My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone,” Trump said.
Trump also called for a large infrastructure project, which was one of the few occasions that drew applause from both Democrats and Republicans.
But Trump did reiterate his campaign promise to cut regulations, noting his recent executive orders on the subject.
“We have undertaken a historic effort to eliminate job-crushing regulations; creating a deregulation task force inside of every government agency; imposing a new rule which mandates that for every one new regulation, two old regulations must be eliminated,” the president said. “We will keep our promises to the American people.”
House Republicans interpreted his message that bureaucrats and regulations need to be reined in as a call for financial reform.
“He started off talking about the economy and was pretty clear about the need to rightsize regulations and regulatory reform, and I think from a big-picture, macroeconomic point of view, regulatory reform and rightsize regulation includes financial regulation,” Rep. French Hill, R-Ark., a member of the House Financial Services Committee, said in an interview after the speech.
His colleague on the panel, Rep. Bill Huizenga, R-Mich., acknowledged that he "would have liked to have heard a specific Dodd-Frank reference,” but “I am certainly willing to accept his discussion of regulatory reform needing to happen and tax reform as being certainly inclusive, not exclusive.”
But Rep. Brad Sherman, D-Calif., warned his Republican colleagues not to go too far. “I think there will be some regulatory relief, but it may get caught up in this desire to just repeal Dodd-Frank, and that is not going to go anywhere in the Senate.”