Another Trump presidency would loosen rules on banks, roll back EV mandates and see a crackdown on ESG investing – which would see 401(Ks) investing money in woke companies.
A second term would see the abolition of “heavy regulations” introduced on Wall Street following the financial crisis, according to his aides.
If the former president is elected to return to the White House, his administration is expected to ease regulations on banks, EV mandates, and crack down on environmental, social, and governance (ESG) investments.
ESG investing considers non-financial factors in investment decisions. That means money will be invested in companies that help fight climate change or help minority groups — but avoiding gun makers or fossil fuel companies.
Although Trump has yet to announce his personnel or key policies, according to a report published Friday by Reuters, experts and his allies are preparing and proposing rewrites that would reduce the power of various regulators.
Trump cut red tape when he spoke about deregulation at the White House in December 2017. Experts and those close to him say another presidency will see deregulation continue.
Since arriving in the Oval Office, President Biden himself has taken steps to reverse some of the regulatory changes made during Trump’s two terms.
Automakers will eventually stop making all-gasoline successors to the beloved muscle cars of the 1960s and 1970s (Photo: Steve McQueen in Bullitt) — but Trump could change the rules to keep gas-powered cars in production longer.
A Trump campaign spokesperson told Reuters that the Biden administration was responsible for a “massive effort to increase burdensome regulations, particularly on our energy and auto sectors.”
Since Biden took office, he has overseen the introduction of various regulations intended to catalyze the adoption of electric vehicles.
Notably, in March, the Environmental Protection Agency introduced a rule that the majority of new passenger cars and light trucks sold in the United States must be electric or hybrid by 2032.
In addition to this national rule, at least eight states have gone even further. They plan to only allow the sale of zero-emission cars, thereby excluding the sale of new hybrids as well as gasoline vehicles.
It is believed that Trump will take a close look at rules to phase out gasoline cars and prioritize electric cars.
Other sources close to Trump said he was likely to target ESG — one, described as someone “who speaks to him regularly about economic issues,” said he would ” sure” to “tackle all these climate change stories.”
In the final months of his presidency, Trump pushed to ban pension plans from considering ESG criteria 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 assess the impact of pension investments on the climate.
Michael Faulkender, a former Trump Treasury official, told Reuters that ESG was “too much of a bystander’s point of view” and that investors should focus on returns – plain and simple.
“This can and has been used to deviate from the fiduciary duty that fund managers have to their clients,” he said.
A source close to Trump said that if he returned to the White House, he would be “sure” to “tackle all this climate change stuff.”
At least eight states plan to ban the sale of new gasoline-powered cars over the next decade — and more are considering joining them.
Another legacy of Trump’s presidency was the relaxation of some Obama-era rules introduced under the Dodd-Frank Act, passed in the wake of the financial crisis.
It imposed new liquidity requirements on financial institutions and imposed “stress tests” on banks to ensure they could withstand economic uncertainty.
Faulkender also opposed stress testing, arguing that if all institutions had to pass the same tests, they would all have the same vulnerabilities, which could lead to problems.
Another rule that came out of the Dodd-Frank Act was the Volcker Rule, which was intended to prevent banks from engaging in proprietary trading, in which they invest for their own gain and not for that of their customers.
Critics argued that the rule was complex and difficult to implement. They also claimed it created compliance issues for banks and could have a critical impact on their viability.
After years of lobbying from investment banks like Goldman Sachs, JPMorgan and Morgan Stanley, regulators eased these restrictions in 2019.
Since then, Democrats — including Sen. Elizabeth Warren — have pushed to reinstate some of these 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 could also be at stake. The agency was created 12 years ago following the Dodd-Frank Act.
After years of lobbying from investment banks like Goldman Sachs, JPMorgan and Morgan Stanley, the Volcker Rule was amended in 2019. Pictured is Jamie Dimon, CEO of JP Morgan.
“These threats should never have materialized,” Warren said on the Senate floor in March last year. “Now we must prevent this from happening again by reversing the dangerous banking deregulation of the Trump era.”
Another important issue on the agenda is the future of the Consumer Financial Protection Bureau (CFPB), an agency born out of the Dodd-Frank Act 12 years ago.
The CFPB is designed to protect consumers from financial institutions, and the question of its existence is politically fraught.
Robert Bowes, a former Trump appointee at 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 regulations and economic policies.”
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