Banking index finds regs slowing under Trump
Banking regulations slowed to a halt during President Trump’s first quarter in the White House, according to a new financial index.
The Banking Compliance Index released this week found that it would take less than one full-time employee for a typical bank or credit union to comply with federal regulations.
The index dipped 63 percent from President Obama’s last full quarter in the White House, when most banks needed more than two employees for this task, although the first-quarter results overlap slightly with Obama’s last 20 days in office.
It’s the lowest score in the history of the index, and provides a much-needed “breather” for banks, said Pam Perdue, chief regulatory officer at the compliance management firm Continuity, which launched the index in 2013.
The banking index measures “regulatory changes” and “enforcement actions” from the Consumer Financial Protection Bureau, FDIC, Federal Reserve, Treasury Department and other financial regulators.
In the first quarter of 2017, there were 47 regulatory changes, including proposed and final rules that affect financial institutions. That’s down from 115 regulatory changes in the previous quarter.
The index also recorded a historic low of 57 enforcement actions taken against financial institutions in the first quarter of 2017, compared to an average of about 157 enforcement actions each quarter during the Obama administration.
This follows President Trump’s regulatory moratorium, which initially ordered many federal agencies not to issue new rules unless they were approved by the White House.
The banking index gives equal weight to new financial regulations and rules that are repealed. So a spike in the index could be triggered by Trump’s plans to roll back regulations on Wall Street, Perdue said.
“That’s the myth about deregulation, that it reduces the burden,” said Perdue. “While it may help in the long run, undoing a regulation takes just as much effort as implementing a new one.”
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