WASHINGTON—Expect changes in leadership among regulatory agencies to come swiftly once the Trump Administration is in charge, says Dennis Dollar.
The former NCUA chairman detailed how Donald Trump’s victory over Kamala Harris will impact financial institutions.
“The impact on financial industry regulation is going to be absolutely dramatic,” said the Dollar Associates principal. “There will be a change at the head of every federal regulatory agency—including the CFPB, NCUA, the FTC and at the Justice Department. The individuals put in charge at Justice will be in charge of defending those agencies and accepting or rejecting their enforcement actions.”
Dollar asserted that President Trump didn’t fully understand the regulatory process in Washington until a couple years into his first term.
“And he left a lot of agencies with holdover heads or longtime career officials in charge,” he said. “That won’t happen this time, as he knows how the system works and when it doesn’t. The changes in the regulatory agencies will come much more quickly in his second term.”
Polar Opposite
Dollar termed the regulatory philosophy of Trump appointees “almost a polar opposite” of the appointees from the Biden Administration.
“Even on those boards, like NCUA, where Democrats still hold the majority, the Trump-designated chairman will control the agenda and manage the staff,” Dollar said. “The change in direction will be noticeable from the first days.”
Dollar said he believes Trump already has his transition team in place and they’ve been working—for a couple months—in case he won.
“The talk is that they will move fast on the regulatory agencies—and I will be surprised if they do not take action in most cases to change who is at the helm before the end of January 2025,” Dollar said.
With Republican control of the Senate, Trump nominees will get swift confirmation and be on the job within weeks of his inauguration, Dollar added.
“Some changes, like the chairman of NCUA, can be made with the stroke of a pen and not require Senate confirmation,” Dollar noted.
CFPB In Trump’s Crosshairs?
Trump can dismiss some department heads, like the CFPB director, immediately upon inauguration even if it takes a few weeks to get a replacement nominated and confirmed, reminded Dollar.
“Regulatory proposals that are pending may be pushed through before January at some agencies, but that will not be received well by the Trump Administration when they take over,” Dollar explained. “The new department heads may either move to repeal those lame duck rules, delay their implementation or go to Congress to get them overturned under the Congressional Review Act.”
The ultimate control over the enforcement staff at the agencies resides with the chairman or director, Dollar said.
“That change, within itself, will impact the direction of the agencies and their approach,” Dollar said. “The staffs will seek to follow the philosophy of their new Trump-appointed agency head who will control their evaluations, assignments, promotions, etc…Trump’s election with a GOP Senate majority is definitely going to be a sea change on the regulatory front.”