Populism or Deregulation? What to Expect from Trump’s Financial Regulatory Agenda

President Donald J. Trump was inaugurated for a nonsequential second term on Jan. 20, 2025. Broad frustration among the electorate has fueled Trump’s meteoric rise in politics and power over the last eight years. Many Americans felt squeezed by a tight economy and held in disdain a federal government perceived as focusing more on industry and foreign affairs than its own citizens.

Dueling ideologies run through the Trump team. Vice President JD Vance’s economic views—and many of Trump’s as well—include an economic populist streak that centers around protectionism and, to a lesser extent, government intervention. Trump has fashioned himself as a man of the people in speeches and at rallies, verbalizing his contempt for “global elites.” Vance fits this mold as well, having grown up in an impoverished town with a single mother suffering from drug addiction. Therefore, it is no surprise that the administration’s economic agenda is driven in part by advocacy for “the little guy”— a notion central to both of Trump’s wins.

On the other hand, big government, bureaucracy, and inefficiency are rejected among the electorate as well as within the administration. These issues are certain to be prioritized, given the rise of Elon Musk’s influence and the creation of the Department of Government Efficiency (DOGE), which seeks to reduce bureaucratic inefficiencies and cut unnecessary regulations. Of course, the president himself has made clear his desire for broad deregulation—most frequently in the energy space, but within financial institutions as well. During his speech to the World Economic Forum (WEF), which includes representatives from nearly all major global financial institutions, Trump said his administration would remove 10 regulations for each one it imposes.

This leaves key players wondering what to expect from a Trump administration in the financial regulatory space—a mixed bag of financial deregulation and consumer-oriented cost-saving proposals. But although they might appear random, a logical thread weaves together these dueling ideologies, which can be placed into three distinct categories.

Populist Economic Policy

Populist economic policy will likely come into play for issue areas with a clear and direct financial impact on consumers. For example, Trump has specifically verbalized his desire to cap credit card interest rates. Traditional conservatives see this granular government intervention as a net negative, preferring a free-market approach in which interest rates are determined by competing forces within the marketplace. Nonetheless, Trump made it clear that protectionist populism would drive this policy.

There are other relevant consumer-level financial regulations to consider as well, nearly all of them mandated through the Consumer Financial Protection Bureau (CFPB) under the Biden administration. These include the Credit Card Late Fee Rule, which would cap credit card late fees by mandate; the Bank Overdraft Rule, which would eliminate or reduce fees for checking account overdraft; and policies related to so-called “junk fees.” Junk fees, as defined by the CFPB, include any financial institution fees considered unnecessary, unfair, or lacking transparency. The fight against these fees is highly regarded among the electorate. Regardless of their negative externalities, these policies all impact consumers financially.  

But unlike the last administration, which wielded tremendous power through the CFPB via rulemaking, penalties, and litigation, team Trump is unlikely to use the heavy hand of bureaucratic federal agencies to advance its agenda. As recently as November 2024, Musk posted on X that “[t]here are too many duplicative agencies” and called for the CFPB to be “delete[d].” Instead, we can expect populist-leaning priorities managed through negotiation tactics and public pressure campaigns. (Negotiation is known to be among the president’s favorite governance tools, going back to his book The Art of the Deal in 1987.) This also falls in line with the deregulatory views that shape the president’s decision making on issues like energy and the environment. Further, negotiations are vital. The previous administration failed to consider many negative externalities of their regulations, including reduced access to credit and capital—a chief concern around forcibly cutting off revenue streams.

Deregulatory Economic Policy

There are separate financial regulatory issues that—despite myriad downstream consumer impacts—do not directly and obviously impact consumer finances. One example is Basel III Endgame, a set of financial requirements from the international Basel Committee on Banking Supervision that notably seeks to impose strict capital requirements on U.S. financial institutions in a bid to strengthen global financial stability. Tangentially related is the Securities and Exchange Commission’s rule on climate risk disclosure, which would require publicly traded companies to disclose their “climate risk,” including greenhouse gas emissions. This sweeping mandate would majorly impact nearly 3,000 U.S. companies, costing significant time and money to implement and report on each year.

The Trump administration will almost certainly abandon these and other top-down financial institution mandates entirely. Not only are there no clear positive impacts on consumers, but the ideological basis by which these particular rules came to be run counter to Trump’s views. However, the method by which they do so is up for debate when considering active litigation and the various agencies involved. Depending on the specific regulation, options include invoking the Congressional Review Act, rescinding existing rules, choosing not to mount a defense in legal proceedings, or issuing executive orders.

Mixed Economic Policy

A third category of existing financial regulations comprises those that clearly and directly impact the consumer, though not in an obviously financial way. For example, Section 1033 (the “open banking rule”) mandates that financial institutions allow consumers to access and transfer their financial data in a standardized and secure manner. While financial institutions have indicated they are not opposed to the rule in theory, specifics from the CFPB have led to concerns about data privacy and security. Similarly, fair access rules protect consumers from discrimination and ensure equal access to financial services. The topic has gained interest from both sides of the aisle due to the perception of politically motivated debanking. However, recent state-level legislation based on varying ideologies is causing strain on financial institutions who could be subject to conflicting regulations. Trump made clear his views on debanking at the WEF, using a public pressure campaign to signal his concerns around the topic. These regulatory items are unlikely to be abandoned entirely; instead, they may be negotiated and perhaps, in the case of debanking, federally legislated.

Conclusion

This is not to exclude the public relations impact of negating or dismantling Biden-era regulations. The Trump administration and congressional Republicans will face much less public pressure around abandoning Basel III’s bank capital requirements than on capping consumer fees. While this might not be a major factor in decision making, it will likely be taken into consideration.

In summary, while the Trump administration’s financial regulatory policy might appear disjointed and random, the threads of its dueling ideologies weave together through protectionist, consumer-focused priorities—likely privately negotiated as opposed to mandated—and deregulatory pro-business actions on top-down policy initiatives. While implementation and deregulation methods might ultimately vary, the administration’s regulatory actions will likely follow these themes.