A number of US board directors, including those in financial services, are wondering what may be in store for them with a new administration now in power. One good source of information on this issue generally is a website published by US advisory firm, Boardroom Resources. Its founder explains his views that US boardrooms should expect pro-growth, competitive policies and a curtailment of regulation. Specifically, on the Dodd-Frank Act, this expert believes the BHC boardroom may consider easing of formulaic compensation matters and reviewing the efficacy of the SIFI specified institutions.
A new plan advocated by Rep Hensarling, chairman of the House Committee on Financial Services, known as the Financial Choice Act, is currently being debated. The Financial Choice Act proposal calls for a relaxation of certain aspects of Dodd-Frank in return for a more conservative leverage ratio, including removing concentrations stemming from bank M&A, reporting requirements for certain acquisitions, curtailing the Financial Stability Oversight Council, removing the SIFI designation, eliminating the FDIC orderly liquidation procedure in favour of a new bankruptcy law code and a repeal of the Volcker Rule. Of course, all of this would be debated as new senior figures are recruited by the new administration for the head of the OCC, FDIC roles and a replacement for the top regulatory post held by Daniel Tarullo until his resignation last week. Implications for these changes include obviously a better M&A deal-making environment and more relaxed conditions for trading and investment by BHCs.
For fintech, the impact remains ambiguous for far. While regulated players may see a more relaxed playing field, including community banks, fintech business models really should not be jeopardized by these changes, at least for a period of time. The Boardroom Resources vid can be fully viewed here: http://boardroomresources.com/episode/boards-can-expect-trump-administration/.
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