The 'Team Trump takeover' of government regulation is now complete

Richard Cordray announced he will step down from the Consumer Financial Protection Bureau.
With the move, the Trump administration will soon be in full control of the financial regulation structure.
The Trump-led agencies could seriously change their enforcement purview.

Without any major legislative victories on his watch, President Donald Trump has been quick to fall back on his record when it comes to regulation.

Trump often touts his ability to roll back "red tape," particularly around the financial sector, as a positive for businesses and the country.

To Trump and his administration, stripping away regulations on businesses and the financial sector has been an important economic driver and one of the crowning accomplishments of the White House's first 10 months.

"We believe this will complete the Team Trump takeover of the regulatory agencies. It should mean by summer there are Republicans running all of the banking agencies," Seiberg wrote in a note to clients on Wednesday.

The future of the CFPB

The CFPB has been instrumental in implementing new rules on auto lending and mortgage practices, as well as involvement in enforcement actions such as penalties against Wells Fargo.

In the short-term, said analyst Issac Boltansky of the research firm Compass Point, Cordray's resignation will scuttle some of the bureau's current work.

Seiberg said Cordray's departure and a potential Trump appointee likely would be a positive for many lending sectors.

Most analysts believe Trump will make Treasury Secretary Steven Mnuchin the acting director of CFPB with a Treasury official handling day-to-day duties. Most possible replacements, however, will still be more favorable to the financial industry, Boltansky said. But they can't make the CFPB toothless.

The results of the Trump regulatory agenda, and the possible future for the post-Cordray CFPB, are already showing up at other regulatory agencies.

Data shows that the Securities and Exchange Commission, where Obama appointee Mary Jo White stepped down at the end of January, filed only 612 enforcement actions so far this year — the fewest in four years. The SEC also only collected $127 million in penalties against companies from February through September, down from $702 million over the same time period last year.

Additionally, new SEC Director Jay Clayton — a former lawyer who defended many Wall Street firms — said the group shifted its focus away from corporate action to more direct-harm cases.

The 'Team Trump takeover' of government regulation is now complete

The future of the CFPB

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