Reality field: What a second Trump time period would imply for US fiscal coverage

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By Pete Schroeder and Michelle Price

WASHINGTON (Reuters) – A victory by US President Donald Trump on Tuesday would continue his administration’s four-year period of deregulation, which industry estimates have brought in at least $ 40 billion in profits for banks and other financial firms.

Here are some more key changes to financial rules policy experts expect if the Republican incumbent wins a second term in the White House.

HOUSING FINANCING OVERHAUL

Trump’s government could push ahead with an ambitious overhaul of the real estate finance market.

The Federal Housing Finance Agency (FHFA) has begun the difficult process of returning Fannie Mae and Freddie Mac (OTC :), the government-sponsored companies that guarantee more than half of the country’s mortgages for the private market. It has allowed the couple to strengthen their capital base by keeping more of their profits and it is imposing new capital requirements.

In a second term, FHFA Director Mark Calabria could pursue plans to raise potentially billions of dollars in additional capital from private sources, reduce the couple’s activities, strengthen internal controls and reduce risk.

FINTECH PUSH

The Trump administration has been a major proponent of innovation in financial services and has already made it easier for tech companies to get into banking. A second term would give Trump officials more leeway to delve further into this often controversial area.

Brian Brooks, acting head of the Office of the Currency Auditor (OCC), has advocated giving fintech companies the opportunity to apply for Bundesbank charters that give them more freedom to expand across the country.

While this idea has been legally challenged by state regulators, a second term from Trump would give the OCC more runway to get its idea off the ground.

Under Trump, the Federal Deposit Insurance Corporation began issuing special deposit licenses to non-banking companies for the first time in over a decade, to help more non-banking companies get into the sector if Trump wins.

BANK CAPITAL

Thanks to bank deregulation legislation passed in 2018 https://br.reuters.com/article/us-usa-house-banks-lobbying-idUSKCN1IN328, Trump regulators have eased capital and liquidity regulations https: //www.reuters .com / Articles / USA-USA-Fed-Banks / Fed-Eases-Post-Crisis-Rules-for-Domestic-Foreign Banks-idUSKBN1WP2OU introduced for many lenders after the 2009 financial crisis, but global US banks were largely excluded from this package .

Lobbyists expect Wall Street banks to get more capital relief if Trump is re-elected, especially with regard to the “G-SIB surcharge,” an additional capital buffer needed by large global systemically important banks that have struggled to get the To loosen requirements.

Another focus of the industry is likely to be the “Collins Change,” a rule introduced after the financial crisis that sets a minimum debt and capital requirement for banks. Federal Reserve officials, including Chairman Jerome Powell, had expressed their willingness to temporarily relax this requirement with the permission of Congress. Four more years under Trump would give the banking industry time to push for lasting relief.

CAPITAL MARKETS REFORM

Since a bill https://www.reuters.com/article/us-usa-house-capital-markets/house-passes-bipartisan-package-on-easing-capital-markets-rule-idUSKBN1K72RL to revise the US capital market rules In 2018, Republican lawmakers and lobbyists urged the Securities and Exchange Commission (SEC) to use their powers to cut red tape for public companies and make it easier for private companies to go public. Policy experts believe the SEC will revise corporate disclosure and reporting rules and ease restrictions on private capital raising during Trump’s second term.

Now that it has become more difficult for shareholders to get companies to address environmental and social issues, the SEC is likely to consider other ways to contain activist investors if Trump stays in office. This could include a potential tightening of short selling restrictions and disclosure rules if activist investors buy company shares, according to policy experts.

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