A 'fair' fight over the law; waiting for the Fed's smoke signals

What's 'fair'? It might take years to find out
The Trump administration has adopted a different definition of the word "fair" than prior administrations when it comes to anti-discrimination laws. This is of course a political minefield to even talk about, but the broad contours of the debate aren't really in doubt. Laws going back to the Civil Rights Act of 1964 have been about trying to course-correct for the historical discrimination Black people and other minorities have been subject to in this country. Trump and others on the right think the course has been corrected too much and are trying to bring it back.

That division is the subtext of Kate Berry's story this morning on fair lending laws and the Trump administration's actions toward them. It started with an executive order from the president that sought to sideline a legal concept called "disparate impact." Under that theory, firms that undertake actions that result in discrimination, whether that discrimination is intentional or not, can be held legally liable for those actions.

Trump's executive order has neutered significant parts of the Equal Credit Opportunity Act, the Fair Housing Act, the Home Mortgage Disclosure Act, and even the collection of lending data. It has also created a groundswell of opposition, most visibly this week when a group of 16 state attorneys general sued the Department of Housing and Urban Development over its guidance that limited the enforcement of equal-housing laws. 

To me, the biggest takeaway was this: the legal fight could last years, as in right through the end of the Trump administration. The next administration might be, well, it might be led by a Democrat, in which case we'll probably get a bunch of executive orders vacating Trump's executive orders. What's that mean for banks? "Stay the course," one source told Kate. 

Fed day!
The Federal Reserve's rate-setting committee, the Federal Open Markets Committee, concludes its regularly scheduled two-day confab today. Our Maria Volkova wrote a preview of the meeting yesterday. 

There isn't a vent on the top of the Eccles Building with white or black smoke billowing out to let us know what the central bankers locked inside the chapel have decided, but we don't need one. Ever since Alan Greenspan, the Fed has gotten increasingly chattier. For the most part, the market knows these days exactly what the central bank is going to do, because they telegraph their moves months in advance.

The CME's Fedwatch tool, for instance, shows 99.1% of investors expect the Fed won't do anything with rates today. I don't know what word describes a situation of more than consensus, but 99.1% sure seems like a number that describes it.

And even if FOMC members weren't so chatty and telegraphic, it would still be a wise bet to expect them to sit on their hands. The state of the jobs market is in doubt, but inflation is still above their preferred targets. And the Iran war is sending crude oil and natural gas prices markedly higher; if that persists, it will feed into the economy. You don't need an economics degree to see that now might not be the time to play around with interest rates (unless you're in the 0.9% that bet on a move).

New sections added to the American Banker website
Finally, you may have already noticed there are two new sections on the American Banker homepage, Wealth Management and Mortgage. These sections comprise stories and coverage from our sister publications, Financial Planning and National Mortgage News. We're very excited about bringing you these stories, which will add to our award-winning journalism and make it even easier for you to find the insights and information you need.