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The amount of penalties that federal regulators have collected from misbehaving financial firms has declined sharply in just the first 200 days of the Trump administration.
The immediate reduction amounts to a tangible benefit for Wall Street brokers, courtesy of a President who’s filled his executive offices with former bankers, and has signed executive order to roll back financial regulations.
A Wall Street Journal analysis shows that The Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CTFC) and the Financial Industry Regulatory Authority (FIRA) have levied, in total, $489 million in fines against banks so far in 2017. That’s a two-thirds decline from the first six months of 2016, when penalties totaled $1.4 billion.
The Journal’s data suggests a reversal of a trend during the Obama presidency of increasing enforcement against firms. Between 2010 and 2015, regulators increased their annual fines from just over $1 billion to roughly $4.5 billion. Policing by the CFTC was responsible for most of the increased actions.
Agencies told the WSJ that first-years of a new presidency are always characterized by declines in federal oversight, due in large part to staff turnover. The first year of the Obama administration, however, saw a slight increase in annual fines from the final years of the Bush presidency in 2008.
Higher penalty figures in previous years could be explained by the Obama administration’s handling of financial crimes related to the 2008 housing meltdown and market crisis.
President Trump has promised to deconstruct many of the reforms created post-financial crisis.
In April, he ordered his Treasury Secretary Steve Mnuchin to conduct a review of all regulation enshrined under the 2010 Dodd-Frank Wall Street Reform Act. Trump previously called the law a “disaster.”
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