New Trump Administration Expected To Undo Biden’s Financial Regulation

Chaos likely to ensue. Catastrophe cannot be ruled out.

Chaos likely to ensue. Catastrophe cannot be ruled out.

[Guest Writer, Marco Rosaire Rossi, is the executive director of Washingtonians for Public Banking and an adjunct professor in political science in Washington state.]
 

The Biden administration was far from perfect when it came to banking regulations, but it did turn a substantial corner in breaking with the neoliberal orthodoxy of previous administrations—including Obama’s. Now, with president elect Donald Trump returning to the White House in January, there will likely be a rapid and dramatic undoing of the Biden administration’s victories. As expected, the consequences of Trump’s hacksaw approach to banking regulations will undoubtedly harm average Americans, and lead to the type of wild west environment that was indicative of the Great Recession.  

First, there is antitrust. Under the Biden administration antitrust regulators experienced an administrative renaissance. Anchored in Executive Order 14036, the Biden administration declared a “whole-of-government” approach to market competition, meaning that ensuring fair and competitive markets was now the responsibility of numerous federal agencies who were expected to work in concert toward the goal. 

After releasing his executive order, the Department of Justice’s Antitrust Division replaced its 1995 Bank Merger Guidelines with the more modern and aggressive 2023 guidelines. The new guidelines deviated from the “consumer welfare standard”—which placed the burden on regulators to prove that consumers would be harmed by a merger—and instead adopted a “structural presumption” standard, which focused on the dominance that a firm would likely have in the market. To outsiders the linguistical maneuver might appear trivial, but in practice it meant the federal government now considered monopolization in-and-of-itself a problem for the market regardless of if it could prove a specific harm to consumers. 

Undoubtedly, Trump will rescind Executive Order 14036. Antitrust enforcement will be returned to the narrow work of a few or one agency and the government will be moved back to a “consumer welfare standard,” especially as it relates to the banking sector. Already, investors are preparing for his administration to approve Capital One Financial Group’s $35.3 billion purchase of Discover Financial, a deal that Biden’s regulators were opposing. 

Next, is capital requirements. In accordance with Basel III Endgame’s international standards, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) have been working on new regulations that would require  America’s largest banks to raise their capital reserves to remain operational. Regulators have proposed that banks with more than $250 billion in assets but are not considered systemically important to the overall economy would see a 10% increase in their capital requirements, while banks with assets between $100 billion and $250 billion would see a 5% increase. This would average to an additional $2 of capital for every $100 of risk-weighted assets. Additionally, the increase would be eased overtime, with full implementation of the regulations scheduled to be completed in 2028. Despite the intense opposition from America’s largest banks, with their lobbyists claiming that any increase in capital requirements would stifle lending, experts believe that the impact on lending would be minimal, and be offset by the long-term benefits of a more stable banking sector. In 2020, economists at the Federal Reserve Bank of New York published a paper that concluded that increased capital reserves among banks correlated with a reduction in the likelihood of an economic slowdown. 

The agreement on capital requirements has not been finalized, and regulators have unfortunately continued to water down their position to appease the banking sector. Still, it was expected that an agreement would be reached soon. However, with a new Trump administration taking the reins of power, an agreement could be postponed indefinitely, or—even if a deal is finally worked out—enforced so casually as to not be effective. 

Finally, there is price gouging. Early on, the Biden administration committed itself to ending price gouging in the financial sector by empowering the Consumer Financial Protection Bureau (CFPB) to go after junk fees, especially in the credit card industry. For decades, credit card companies had been exploiting loopholes in the regulatory framework, charging people an average of $32 each time they made a late payment. These late payment fees had become a cash cow for the industry, totaling $14 billion a year, and equaling 10% of the total amount that consumers paid in all interest and late fees to financial companies. Biden’s appointed head to the CFPB—Rohit Chopra—put an end to this excessive price gouging by reducing late fees to $8 and requiring credit card companies to be transparent with their math when issuing bills to consumers. 

During his previous administration, Trump significantly hindered the CFPB. With the United States Supreme Court’s decision in Seila Law LLC v. CFPB (2020), the CFPB was determined not to be an independent executive agency, meaning that the president is empowered to fire the heads of the CFPB without cause. There is little doubt that once in office Trump will remove Rohit Chopra from the agency’s leadership, appoint his own people, and rapidly undo the progress the agency has made on fighting price gouging. 

What? Me Worry?

Undeniably, many people voted for Trump because they believed that he would curb inflation. The high cost of housing, energy, and food in the post-pandemic economy is surely a burden for working people, and they are right to be angry at the Biden administration for not doing more to tackle the issue. However, Trump’s lackadaisical approach to monopolization, regulation, and price gouging in the financial sector will only make matters worse. 

Trump and the Make America Great Again movement might be an outgrowth of the pain and frustration felt by Americans in the aftermath of the Great Recession, but his governing ideology—especially when it comes to the nation’s largest financial institutions—won’t help hard working Americans. If anything, these reckless policies will likely drive the country into another economic collapse.

About Guest Writer

Citizen Journalist • Member since Jun 15, 2008

Since 2007, this moniker has been used over 150 times on articles written by guest writers who may write once or very occasionally for Northwest Citizen, but not regularly. Some guest writers [...]

Comments by Readers

Richard Verbree

Nov 25, 2024

your headline is a bit contradictory, Biden bailed out silicon valley bank and one other in an unprecedented level far above the fdic $250,000 per account. Those banks failed because of poor-not enough regulation

Trump never tanked the economy like the “great recession”  in his first term either 

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Carol Follett

Nov 30, 2024

 

Thank you for this informative article, Marco. As you pointed out, we have not had enough restraints on banking as it is and I shiver to think what will happen to people with a return to a “price gouging” credit industry and the victims it will create. 
 
It looks like greed will have no boundaries and we are about to experience something that makes the ” revolving door” look like a public service. We have a monstrous “fox (or two) in the henhouse.” Evidently, Musk would like to and may use his appointment to do away with the “Broadband Equity, Access, and Deployment (Bead) Program and replace it with his Star Link satellites, a subsidiary of his SpaceX.
 
I do not understand how some everyday folks do not know the meaning of “in the public interest.” Those of us who live paycheck to paycheck are that “public.” And we need financial protection. Regulation is protection. Regulation is not a dirty word. Regulation is a good thing; it is order and balance. Unregulated is wild, unbalanced, and dangerous.
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Richard Verbree

Dec 01, 2024

Hi Carrol, I hope rural broadband is canned by musk, rhe federal government has plowed hundreds of millions into “rural broadband service” the last 15+ years and not achieved what starlink did for rural internet, the government would save a fortune and connect everyone if they provided a discounted starlink instead of this empty expensive promise of cable internet, which is now an outdated concept.

Starlink is a great example of the private sector solving problems at no cost to society and government wasting hoards of money for decades while solving almost nothing

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Jon Humphrey

Dec 01, 2024

The response to rural broadband will be multi-tiered:
Conflicts of Interest:
The conflict of interest here is obvious here as Musk owns the company that will benefit the most from his payoff to Trump. Money spent on Starlink will go directly into his pocket and the pockets of other predatory one percenters. This is obvious theft from the American people by the Trump administration.
With Verizon employee Ajit Pai most likely coming back to the FCC we can expect that Americans will continue to pay the highest prices for the least bandwidth in the developed world, as they do now.
Was Money Wasted on Rural Broadband?:
It’s true that the Biden Administration refused to learn the lessons from the Obama and previous administrations and lesson #1 is that YOU DON’T GIVE MONEY TO BIG TELECOM BECAUSE THEY STEAL IT! So yes, much of the funding spent on “rual broadband solutions” went directly into the pockets of big telecom investors who delivered inferior products and continue to. However, money spent on public infrastructure was spent well.
Had Dig Once policies been established and fiber-optics installed as a public utility, prices would be low.
Subsides will not help! As we learned when incompetent County Executive Sidhu partnered with equally incompetent former PUD Commissioner Grant, and WAVE, for a Nooksack Tribe Starlink project that mostly failed. Why? Because even with discounts many can’t afford it. Starlink is simply too expensive and its performance is spotty often delivering bandwidth well below the state’s minimum high speed standard especially when load tested. As an owner of a successful business that lives in a million dollar home the idea that $50 or $100 for Starlink a month is unaffordable may seem odd to you, but 60% of Americans are functionally poor. Also, should we give Musk corporate welfare instead of put our money into fiber? No.
No Other Connection is Equivalent to Fiber:
Even Musk himself will tell you that he needs more fiber on the ground for Starlink to work correctly, as he did in a fierce wireless article a few years ago. As explored in “Fiber” and many other sources, every wireless technology is an extension of fiber.
Fiber provides virtually unlimited bandwidth that uses very little power, lasts over a century if buried and has low environmental impact. In fact it can help with climate change because it can be used to manage smart grids, lasts a long time and much more. Starlink is very wasteful and doesn’t work well often. Would you accept a car that only runs some of the time and then not very well? Especially if you lived in the middle of nowhere? Well that’s what Wireless and Satellite solutions are. We are telling people in rural America to accept garbage broadband when we did the much more complex task of running them electricity via the Rural Electrification Act many moons ago. They need fiber. Not DSL or Coax, or something worse like wireless and satellite, fiber. And truly robust fiber.
Musk is NOT a genius:
Just like Steve Jobs was the idiot figurehead that abused workers and stood on the backs of much smarter people like Steve Wozniak, the guy that actually made the original Apple computers work, Musk is just another idiot businessman who believes he is smarter than he is. The reason dumb people think they’re smart is explained by the “Dunning-Kruger Effect.”  https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
Tesla was originally founded by much more capable engineers and its success is still related to its employees today. Like most companies the figureheads tend to be bat-shit crazy morons not capable of doing the engineering work. Why workers tolerate that, and don’t just form employee owned companies, I’ll never know.
Articles and Books:
Assuming that you would like to actually educate yourself on the topic here are some sources.
“Fiber” by Susan Crawford is available at the library.
“The 5G Myth” by William Webb should also be available at the library.
Local Author Leslie Shankman compares connection types in the article below. Note: Comparing Starlink to fiber is like comparing apples and oranges, btw.
https://nwcitizen.com/entry/fiber-vs-cable-vs-wireless/writer/66
More on Starlink: (aka Starlink has already been tried to solve our rural broadband problems and it sucks compared to real fiber, and requires fiber to work well anyway.)
https://nwcitizen.com/entry/starlink-is-no-star/search/c6f96d4b1dd79c0466eb025c40b1b360
The solution is what it’s always been. To establish Dig Once policies, treat broadband as the necessary utility it is, and run it to every home.



 

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Richard Verbree

Dec 01, 2024

All government contracts have a conflict of interest, if starlink is fastest and cheapest, so be it. If musk makes money while being fastest and cheapest so what?

I have starlink and a tmobile 5g gateway.

They both work very well, supporting multiple devices. 

Did you forget the life saving communication network musk deployed for ukraine and hurricane victims here in the US?, fiberoptic couldn’t have done that, would take 10 years of digging to do what musk did in 3 days for ukraine

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Richard Verbree

Dec 01, 2024

Musk is no genius, but he is a doer unlike any other, he brought the precious electric car to the world (to save the planet or so the left believes) long standing Ford and GM are still trying to catch up and suck at it even with more government subsidies than tesla, watching all this unfold is funnier than any comedy writer could dream up. 

Oh….I almost forgot, who’s company landed a rocket back on its launch pad recently???, LOL!   if that’s not genious, I don’t know what is…..think of the positive environmental impact of reusing rockets  rather than only one time use as has been for…..I don’t know how long, like forever

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Jon Humphrey

Dec 01, 2024

LOL, talk about knowing enough to be dangerous. Your response is completely nonsensical.
5G networks and Starlink REQUIRE fiber-optics to work just like everything else. Yes, it’s nice he did something during an emergency, but I’m talking about data moved and price per Mbit. Of course, had cheap public fiber been available the local areas you refer to would have had their own emergency response systems and not had to beg oligarchs for help. Oh wait, emergency responders already have FirstNet. Starlink also makes a lot of money by greasing the wheels of the war machine, so his “help” in the Ukraine was just to serve the MIC. Starlink also makes custom military satellites. 
You are again comparing apples and oranges. Wireless and satellite are EXTENSIONS OF FIBER! Try reading a book sometime like the ones I mentioned.
Starlink’s own pricing sheet shows that it has much higher cost than fiber-optics per Mbit. At only 100 mbits for $100 (sometimes as it doesn’t hold up to testing) it is at least 20 times more expensive than public fiber networks like the one in Chattanooga, TN and much less reliable. Chattanooga offers Gigabit, that’s 1,000 Mbits for about $58 per month. They offer 10 Gigs for what Starlink offers their highest tier for which which is at least 45 times slower than public fiber. Starlink also comes with data caps.
All of the rates for Starlink are unaffordable to the poor. https://www.cnet.com/home/internet/starlink-internet-review/ and the testing they use to confirm their speeds is NOT load testing, so therefore inaccurate. Again, Musk himself admits that he needs fiber on the ground for Starlink. I guess you’re just not going to talk about that. Shhhh, facts don’t fit your propaganda so mum is the word.
So you are admitting that you are ok with fascist conflicts of interest to support a technology you don’t really understand, that doesn’t work well, that you have no evidence to support, to create oligarchs? Do you also understand that your private company will be looking at all of your data and own you? I’m sure the answer is no as your commentary shows virtually no research in general.
Most of the research from SPACEX started with NASA. SPACEX admits that they rely heavily on NASA. So again, just like we should have had robust public broadband systems in place for emergencies and to remain competitive as a developed country, we should have funded NASA more as that is always the cheapest, best, route in the long run.
Electric cars won’t save the planet, they might make a bit of a dent, but only mass transit can make a real impact. So Musk didn’t create electric cars because he gives a shit, he did it because he thought their might be a market for it just like Nissan. Also, he didn’t really create electric cars at all. There was a time in US history when they were more popular than fossil fuel vehicles and again he bought the company from more talented engineers who handed him their work.
Again, you’d have to actually read something other than MAGA propaganda for a change to get that. Try, “The Future is Now.” It’s above a 4th grade reading level but you can use your Starlink connection to look up the big words, you know, when it works.
Musk is not a doer, his employees are, he’s just the oligarch that bought the company and now he’s cashing in on his donations, I mean investment.
Stop pretending like businessmen do real work. There is no more useless pursuit than economics. The entire system is made up and you will find out soon that you voted against your own interests, especially when it comes to healthcare.
Also, you say your connections work well. Where is your data, where are your load tests, where are your metrics? What are you doing with your connections? No one who knows what they’re talking about is going to take you seriously until you backup your arguments with actual data based on real testing methods.
You totally avoided responding to the Rural Electrification Act, testing, the failed Starlink project in the county, etc. I will respond again when you demonstrate an even fundamental understanding of the technologies you’re pushing. After all there is a high likelihood that you are a Starlink investor. You have made no significant argument based on real data.
In Japan the cost of Gigabit FTTP is about $25 US with no equipment fees. Oh yeah, Starlink has high equipment fees too and a short lifespan on their equipment. Can’t wait for those satellites to need maintenance in space or fall though the atmosphere every few decades when fiber lasts for centuries when buried. My God, take a second to think about your sentences before saying them out loud.
Hang on, I’ll get you going with your response, “Me like Starlink, don’t look into me investments, Musk good, stand by Trump, wear MAGA hat, so must be good man-person. Me no like books or testing. Make me and Musk sad. Tears under MAGA hat.”  

 

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Richard Verbree

Dec 01, 2024

Yes they do need fiber, but only between towers and servers, not every single road in the United states that has a residence which has to be like 95% of roads, wireless elimates like 85% of digging as far less miles need to be dug

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Richard Verbree

Dec 01, 2024

And…..those horrible private wireless companies will pay for that fiber on their own and the government won’t be burdened to dig trenches along every road in America

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Richard Verbree

Dec 01, 2024

Jon, you don’t live in every day America, NASA did not land a rocket on its pad, space ex did, the promise of government provided rural “high-speed internet” is a grease the wheels boondoggle for nearly 2 decades.

And as far as the profit driven war machine in ukraine who is feeding it these days ?, oh yah, the left, give ukraine just enough bullets and money to not loose, but not enough to win either, just enough to keep the arms manufacturers making bank.

I never thought I’d see the day that the left advocated for an endless stalemate war of continual death and destruction and the right wanting it to end.

“Get out of aphfganistan” and let the taliban take over, but “support” ukraine through endless money spending in ukraine to not win?

 

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Jon Humphrey

Dec 01, 2024

Again, you are comparing apples and oranges. Wireless is not even close to equivalent to fiber. Also, answer some of the questions put to you. Are you an investor? Your public profile seems to suggest yes. Do some reading and add about 30 years of IT expereince to your resume and then maybe you can stand up to a real discussion with me. 
Otherwise readers should view your comments as what they are. Unsupported propoganda.

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Jon Humphrey

Dec 01, 2024

Oh yeah, I almost forgot. You admitted to having 2 connections. A 5G and Starlink connection because neither really works well enough on its own. So let’s see, that’s at least $200/month to $500/month in connections plus equipment costs for a connection that requires fiber to work well. Oh, and you could get Gigabit for $58/month on public networks. What a joke.

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Richard Verbree

Dec 01, 2024

What you want me to read is likely out of context propaganda…...

Had you thought of the fact that gready musk and other private wireless people will have to put fiber in to support their infrastructure?, at their cost?

Isn’t food and water more important than fiber optic internet?, after we get free food, water, shelter and a guaranteed minimum income, then I will concern myself with the government providing me and everyone with internet capable of streaming 50 movies all at once.

This addiction to government “owing” society this or that is b…...t, the only obligation the government has to the citizens is maintaining law and order which they are failing at lately.

Your energy should be put into holding the counties feet to the fire to build the new jail so that we can incarcerated and rehabilitate criminals and keep our streets safer and prevent daily rearrests and reoffenses of the “frequent flyer criminals” 

The government doesn’t exist to serve us hand and foot, if anyone wants high (enough) speed internet to zoom call or stream anything, it is available anywhere you can see the sky for $120/month, or if you are in a city,  a cheap smart phone on a non name brand carrier you have internet in your hand for $35/month.

Problem solved 

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Richard Verbree

Dec 01, 2024

I have 2 because I have cameras at a barn to watch my animals and care for them better to feed you.

Do not accuse me of propaganda, what I say is my opinion based on my experiences and recent news, when you don’t like my “average person” opinions you denigrate me, which is so school yard lame.

I think your 30 years IT experience has biased you heavily, some people swing hammers and grow food and build roads, there is more to life than the internet. 

Apples and oranges have a lot in common, they are both fruit, both good for you, but we can live without both them also, therefore I will continue to compare apples and oranges, because in the real world there is plenty internet for all who want it.

 

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Richard Verbree

Dec 01, 2024

I have no public profile, I do not do social media because of argumentative interactions where plain logic and facts isn’t acknowledged like our exchange here.

Facebook (fakebook as I call it), x, Instagram is destroying young people’s lives because we talk AT each other not WITH each other, my way or the highway

I can aggree to disaggree, can you?

That is the most important question in civilized discourse

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