President Trump's recent executive orders are reshaping the landscape for financial services through significant changes to financial regulation, trade policy, and digital assets. At SFNet's Asset-Based Capital Conference in Las Vegas last week, industry leaders and policy experts gathered to analyze these changes and their implications for the lending market.

During a key economic and policy panel at the conference, Laura Jakubowski, Director of Knowledge Management and Innovation at Goldberg Kohn, moderated a discussion examining these policy shifts. The panelists, including Seth Bloom of Bloom Strategic Counsel, Lon Goldstein of Goldstein Policy Solutions, and Michael Skordeles of Truist Advisory Services, analyzed how the administration's policies are affecting the industry. The conversation focused on practical implications for lenders. The panel provided particular insight into financial services regulation, noting how the changes at the FDIC, OCC, and CFPB are likely to influence lending practices. The panel explored several critical areas, including the impact of trade measures, changes to merger and competition policy, and the potential effects of tax policy given narrow congressional majorities.

The administration's trade measures have evolved rapidly since January, starting with a 10% tariff on Chinese goods and 25% tariff on imported steel. Last week, the White House announced a new "Fair and Reciprocal Plan" for trade relationships, directing the Commerce Department and U.S. Trade Representative to investigate non-reciprocal trade arrangements. The comprehensive review will examine tariffs, value-added taxes, exchange rates, and market access barriers affecting U.S. companies. The changes come as Federal Reserve Chair Jerome Powell provides additional clarity on several key policies during his testimony before Congress this week.

The administration's approach to bank regulation is evolving, marked by several executive orders affecting institutional policies and practices. One January 20 order ends DEI programs in the federal workforce and requires federal contractors to certify they do not operate programs promoting DEI. For financial institutions, particularly those working with government contracts, this order requires review of existing diversity programs and hiring practices.

Federal Reserve Chair Powell's recent Congressional testimony about Basel III implementation further clarified the regulatory direction. Powell emphasized that the Fed will take a measured approach to capital requirements, particularly for regional banks, noting that "Basel III was not supposed to be an exercise in raising capital in U.S. banks." This stance aligns with FDIC Acting Chairman Travis Hill's focus on supporting lending activity while maintaining safety standards. SFNet will continue to advocate for the industry's interests as these capital requirements are developed, particularly regarding their impact on ABL.

Another significant change comes in the climate risk arena. The administration has modified requirements for climate-related stress testing, making such tests optional for financial institutions. These tests can no longer be used in connection with setting prudential capital requirements. Instead, climate considerations will be evaluated within existing frameworks such as credit and operational risk assessments.

A sweeping executive order on digital assets, signed January 23, signals a major shift in how banks can engage with cryptocurrency and blockchain technology. The order establishes a new Presidential Working Group on Digital Assets and promotes the development of dollar-denominated stablecoins while prohibiting agencies from pursuing central bank digital currencies.

Additional Executive Order Expands White House Oversight

Since the Conference, the administration has issued another executive order requiring independent financial regulators—including the FDIC, SEC, and CFPB—to submit proposed rules to the White House before publication. This requirement also extends to bank regulatory functions at the Federal Reserve, though monetary policy remains independent.

Legal challenges to this order are expected, as it formalizes executive oversight over agencies traditionally operating with regulatory independence. Industry experts note that while this change may not immediately alter policy decisions, it introduces additional procedural requirements that could affect the timing and scope of future financial regulations.

Congressional and State-Level Considerations

Changes to consumer protection oversight are creating new dynamics in the lending environment. The Consumer Financial Protection Bureau is essentially pencils down, and Powell clarified that while the Fed retains some consumer protection enforcement authority, it lacks examination authority for banks that the CFPB typically supervises. The Fed continues to oversee consumer compliance for banks under $10 billion in assets, while larger institutions currently operate under modified examination frameworks.

State regulators are actively responding to these federal changes. Banking departments and attorneys general across multiple states are evaluating their supervision approaches, creating new considerations for lenders operating across state lines. Several aspects of the administration's policies face judicial review, including matters related to the Department of Government Efficiency's (DOGE) access to Treasury Department systems.

As discussed at the SFNet ABCC conference, the narrow margins in Congress add uncertainty to the implementation of these policies, particularly regarding the extension of Trump-era tax cuts. Panel experts noted that this political dynamic could affect both the pace and scope of regulatory changes, while also influencing how financial institutions approach lending decisions in the coming year. The new trade investigation, which will examine relationships with all U.S. trading partners, adds another layer of consideration for lenders evaluating cross-border transactions.

Industry Outlook

Legal challenges and ongoing policy developments mean lenders must stay particularly attuned to changes at both federal and state levels. SFNet will continue to advocate for the industry's interests as these policy changes develop.