Another Trump presidency would loosen rules on banks, reduce electric vehicle mandates and see a restriction on ESG investing, which would involve 401(K)s investing money in woke companies.
According to his advisers, a second term would mean the elimination of the “onerous regulations” introduced on Wall Street after the financial crisis.
If the former president were elected to return to the White House, his administration is expected to loosen regulations on banks, electric vehicle mandates and clamp down on environmental, social and governance (ESG) investments.
ESG investing weighs non-financial factors in investment decisions. That means the money goes to companies that help address climate change or minority groups, but avoids firearms manufacturers or fossil fuel companies.
Although Trump has yet to announce his key staff or policies, report says published on Friday by ReutersExperts and their allies are preparing and proposing rewrites that would reduce the power of several regulators.
Trump cuts red tape while speaking about deregulation at the White House in December 2017. Experts and those close to him say that in another presidency, deregulation will continue.
Since taking the Oval Office, President Biden himself has taken steps to undo some of the regulatory changes made during Trump’s two terms.
Automakers will eventually stop making fully gasoline-powered successors to the beloved sports cars of the 1960s and ’70s (pictured: Steve McQueen in Bullitt), but Trump could change the rules to keep gasoline cars in production for longer.
A Trump campaign spokesperson told Reuters that the Biden administration was responsible for a “massive push to increase burdensome regulations, especially in our energy and auto industries.”
Since Biden took office, he has overseen the introduction of several regulations designed to catalyze the adoption of electric vehicles.
Notably, in March the Environmental Protection Agency introduced a rule that most new passenger cars and light trucks sold in the U.S. must be electric or hybrid by 2032.
In addition to that national rule, at least eight states have gone even further. They plan to allow only zeo emissions cars to be sold, ruling out the sale of new hybrids and gas vehicles.
Trump is believed to take a close look at rules that will phase out gasoline-powered cars and prioritize electric ones.
Other sources close to Trump said he was likely to target ESG; one described as someone “who regularly talks to him about economic matters” said he would be “sure” to “pursue this whole climate change thing.”
In the final months of his presidency, Trump pushed to ban retirement plans from taking ESG criteria into account when making investments.
Then in 2022, President Biden’s administration reversed restrictions imposed under Trump and the Department of Labor announced a rule directing government agencies to evaluate the impact of pension investments on the climate.
Michael Faulkender, a former Trump Treasury official, told Reuters that ESG issues are “too much in the eye of the beholder” and that investors should focus on returns, plain and simple.
“It can be used, and has been used, to deviate from the fiduciary duty that money managers owe to their clients,” he said.
A source close to Trump has said that if he returns to the White House he will be “sure” to “pursue this whole climate change thing.”
At least eight states plan to ban the sale of new gasoline-powered cars in the next decade, and others are considering joining them.
Another legacy of the Trump presidency was the elimination of certain Obama-era rules introduced as part of the Dodd-Frank Act, passed in the wake of the financial crisis.
He imposed new liquidity requirements on financial institutions and ordered “stress tests” on banks to ensure they could withstand economic uncertainty.
Faulkender has also opposed stress testing, arguing that if all institutions must pass the same tests, they will all have the same vulnerabilities, which could cause them all to run into the same problem at the same time.
Another rule that emerged from the Dodd-Frank Act was the Volcker Rule, which was intended to limit banks from engaging in proprietary trading, in which they invest for their own benefit and not that of their customers.
Critics argued that the rule was complex and difficult to implement. They also claimed that it created compliance issues for banks and could affect their viability to a critical degree.
After years of lobbying by investment banks such as Goldman Sachs, JPMorgan and Morgan Stanley, regulators eased those restrictions in 2019.
Since then, Democrats — including Sen. Elizabeth Warren — have been pushing to restore some of those regulations. Many used the collapse of Silicon Valley Bank last year as ammunition to make their case.
The fate of the Consumer Financial Protection Bureau may also be at stake. The agency was created 12 years ago as a result of the Dodd-Frank Act.
After years of lobbying by investment banks such as Goldman Sachs, JPMorgan and Morgan Stanley, the Volcker Rule was modified in 2019. In the photo, Jamie Dimon, CEO of JP Morgan.
“These threats should never have been allowed to materialize,” Warren told the Senate in March of last year. “Now we must prevent them from happening again by reversing the dangerous banking deregulation of the Trump era.”
Another important issue at stake is the future of the Consumer Financial Protection Bureau (CFPB), an agency born of the Dodd-Frank Act 12 years ago.
The CFPB is designed to protect consumers against financial institutions and the question of its existence has been politically fraught.
Robert Bowes, a former Trump appointee to the Department of Housing and Urban Development, has called for its abolition.
He told Reuters he was “very concerned about the Biden administration’s disastrous banking regulation and economic policies.”