The United States is now about 48 hours into President Donald J. Trump’s second term in office. The initial rush of executive orders — heavily focused on immigration, energy exploration, and changing the nature and responsibilities of the federal workforce — memoranda, pardons, and proclamations have been released. With the first wave of policymaking complete, what comes next, both on Capitol Hill and in the Trump administration?
We’ll explore the answer to that question this week, but first, an update on the turnover at the nation’s financial regulatory agencies.
Acting Heads Take Over
“Pursuant to the U.S. Constitution and the laws of the United States,” on January 20, President Trump directed several “individuals to perform the functions and duties of the indicated positions in an acting capacity until the position is filled by appointment.” The list included:
- David Lebryk to be Acting Secretary of the Treasury;
- Andrew Ferguson to be chair of the Federal Trade Commission (FTC);
- Mark Uyeda to be Acting Chair of the Securities and Exchange Commission (SEC); and
- Travis Hill to be Acting Chair of the Federal Deposit Insurance Corporation (FDIC).
Obviously, that list is incomplete. As of Wednesday afternoon, the president still had made no personnel announcements regarding the Consumer Financial Protection Bureau (CFPB) or the Office of the Comptroller of the Currency.
Though only serving in an acting capacity, on Tuesday FDIC Acting Chair Hill outlined a path forward for the agency over the next several years. Specifically, he said the commission will “adopt a more transparent approach to fintech partnerships” and “encourage more de novo activity” in the banking sector. That promise could mean the FDIC will revisit its Biden-era guidance for bank-fintech partnerships in a way that will make it easier for banks to work with fintechs and for smaller financial institutions to address growing technology costs for community banks. It could also mean that the FDIC will withdraw its Biden-era brokered deposits rule and seek to modernize the Bank Secrecy Act.
Under Acting Chair Uyeda, the SEC also got quickly to work. On Tuesday, the agency launched a “crypto task force” that, for digital assets, will help the SEC “draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.”
President Trump may also want to act quickly to fill the void at the CFPB. That’s because on Monday morning, just hours before President Trump’s inauguration, the agency took the unusual step of releasing a report directed at state regulators that provided a comprehensive set of recommendations to strengthen state-level consumer protection laws. The report also included a compendium of guidance documents summarizing its enforcement strategies and regulatory insights that was “designed to serve as a resource for state lawmakers and regulators.” Unspoken? The likely intention of this release was to provide state regulators with a consumer protection playbook to follow under the Trump administration.
Of course, this move was made in obvious anticipation of Republicans’ coming strikes against Biden-era CFPB rulemakings and against the CFPB’s oversight and enforcement capabilities more generally.
Congress’ Deregulatory Agenda
As AXIOS reported, Senate Majority Leader John Thune (R-S.D.) has said he has a “fairly lengthy list” of last-minute Biden rules he wants to reverse using the Congressional Review Act. (As a reminder, under the Congressional Review Act, or CRA, the U.S. Congress has until mid-May to unwind any regulation the Biden administration issued in the second half of 2024.)
“We are scrubbing right now to determine what is eligible,” Sen. Thune told AXIOS.
While we will have to wait to see what rules make the cut, it is likely Republicans will target:
- A CFPB rule that prohibits creditors from obtaining and using information on medical debts in credit eligibility determinations;
- An FTC rule that prohibits selling or purchasing fake consumer reviews or testimonials, buying positive or negative consumer reviews, creating company-controlled review websites that falsely provide independent reviews, or selling or purchasing fake indicators of social media influence;
- An FTC rule that requires parties to transactions that are reportable under federal law to provide documentary material and information for the FTC and U.S. Department of Justice to determine whether the transaction may violate antitrust laws;
- A Department of Treasury rule that sets anti-money laundering regulations for residential real estate transfers, including requiring certain persons involved in real estate closings and settlements to submit reports and keep records on non-financial transfers of residential real property to specified legal entities and trusts nationwide;
- A Department of Energy rule that strengthens oversight of gas water heaters;
- An Internal Revenue Service rule that requires more reporting from taxpayers on income earned from cryptocurrencies;
- A Federal Communications Commission regulation that allows schools and libraries to lend Wi-Fi hotspots to students through the E-Rate program; and much, much more.
It’s still unclear whether Republicans in Congress and the Trump administration will target the CFPB’s final open banking rule, which was released last October. But as we have noted in the past, President Trump pursued open banking during his first term in office. This regulation also has the strong support of Republicans in Congress.
Other Matters Of Immediate Concern
In addition to undoing last-minute Biden-era regulations, Congress will soon turn to consideration of a debt limit increase or suspension. Before leaving office, former Treasury Secretary Janet Yellen announced the federal government would reach its statutory borrowing limit on January 21, yesterday, and, at that point, the agency would begin deploying extraordinary measures to keep the U.S. government from defaulting.
And just how long do lawmakers have to avoid a default? As Punchbowl noted this morning, “Trump and GOP leaders must resolve the debt-limit issue in the coming months, probably by early summer, although there’s no ‘X date’ yet.”
It is unclear yet whether Republicans will try to include a debt ceiling increase into their major priority for the first half of the year: a budget reconciliation package. It also is unclear whether Republicans will try to pursue a single budget reconciliation bill or two. (In the event there are two, the party is likely to separate them into a spending bill and a tax bill.) Republican leaders will hold “listening sessions” this week with members of their caucus to try to reach consensus on this issue.
Soon, Republican leaders also will have to determine whether they will bring forward legislation that provides aid to victims of the California wildfires. According to AXIOS, in a meeting yesterday with House Speaker Mike Johnson (R-La.) and Majority Leader Thune, President Trump said an aid package “could be good leverage to get the big debt limit hike” Republicans have been pushing. (In related news: President Trump will visit Los Angeles Friday to get a first-hand look at the California wildfire damage.)
Over the coming months, the Senate also will need to evaluate and vote on the nominations of hundreds of individuals to serve in the Trump administration, including several cabinet nominations that are still pending. In yesterday’s meeting, Majority Leader Thune made it clear to the commander-in-chief that he is willing to allow recess appointments — the seating of nominees when the upper chamber of Congress is not in session — if Senate Democrats try to slow-walk political nominees.
Regarding financial services and financial technology, House and Senate lawmakers already are making moves.
As Roll Call noted, House Financial Services Committee (HFSC) Chairman French Hill (R-Ark.) has announced a new task force to monitor the Federal Reserve Board. The Monetary Policy, Treasury Market Resilience and Economic Prosperity Task Force, which will be chaired by Rep. Frank Lucas (R-Okla.), will conduct hearings focused on Fed oversight of monetary policy and the execution of what Chairman Hill called the Fed’s “core mission” to maintain price stability. Additionally, Senate Banking Chairman Tim Scott (R-S.C.) is set to launch a subcommittee focusing on digital assets. This panel will likely be chaired by crypto supporter Sen. Cynthia Lummis (R-Wyo.).
According to Punchbowl, the incoming chair of the HFSC Subcommittee on Digital Assets, Financial Technology and Artificial Intelligence, is eager to get working on an “ambitious crypto agenda for the 119th Congress.” Rep. Bryan Steil (R-Wis.) told Punchbowl, “We need to make sure that we’re doing a couple of things in the space — one, preventing fraud, protecting customers, and two, really importantly, ensuring the U.S. remains a leader in the market space.” More specifically, Rep. Steil said digital asset legislation that was approved by the House last year would only be a “starting point.”
Additionally, this morning when gaveling in a meeting of the HFSC, Chair Hill again spelled out his priorities for the 119th Congress. In Chair Hill’s own words, that list includes:
- Improving the quality and condition of financial regulation;
- Building a vibrant community banking system;
- Bringing legal clarity to digital assets;
- Providing innovators with new tools to build decentralized financial products and services;
- Broadening financial literacy and investment opportunities;
- Protecting the global role and value of the dollar by addressing inflation;
- Closely examining the Federal Reserve Board’s monetary policies;
- Enhancing consumer financial privacy;
- Reinvigorating the housing market; and
- Providing strong oversight of financial regulators.
In addition to what’s happening on Capitol Hill, we expect President Trump to issue even more executive orders and actions, including initiatives related to trade and technology in the coming days and weeks.
Stay tuned.