The media published information according to which the New York authorities are tightening financial scrutiny ahead of the January return of Donald Trump, who won the United States presidential election last month, to the White House.
According to journalists, the Department of Financial Services will more thoroughly scrutinize banks, insurers, and cryptocurrency companies doing business in New York. The relevant actions are related to the fact that Donald Trump intends to roll back financial regulations.
Adrienne Harris, the mentioned department head, said during a conversation with media representatives that scaling back federal regulations will certainly increase the volume of consumer protection cases that can be initiated as part of law enforcement practice. It was also separately noted that the Department of Financial Services will continue to focus on getting money back to consumers. The number of staffers in this department has increased by hundreds over the past few years. Adrienne Harris separately noted that the Department of Financial Services is not ideological. It was also mentioned that work will be carried out to fill potential new gaps that may emerge because the regulator does not have a partner.
Adrienne Harris also announced her intention to ask the Governor of New York for additional powers if necessary. The corresponding need, according to the head of the department, may be related to the process of pushing back against the relaxation of federal regulation.
It is worth noting separately that the Department of Financial Services is a regulator that, as part of its activities, among other things, issues licenses to banking giants headquartered in New York City.
During his election campaign, Donald Trump repeatedly stated his intention to carry out the largest regulatory reduction in the history of the United States. Moreover, its supporters are in favor of disbanding entire agencies. In the context of the relevant potential plans, the Consumer Financial Protection Bureau has been repeatedly mentioned, which, according to media reports, is a kind of target for representatives of the Republican Party of the United States.
Last month, Donald Trump tapped Paul Atkins, a proponent of cryptocurrencies, as the new chairman of the US Securities and Exchange Commission. In the context of the relevant decision, it was noted that Mr. Atkins would pursue regulation based on common sense considerations.
Also, according to media reports, Donald Trump’s team has the idea of disbanding the Federal Deposit Insurance Corporation, which was founded to protect consumers from the collapse of banks.
If all the mentioned intentions of Mr. Trump and his future administration regarding regulatory practices are implemented, there will be a significant and in a certain sense fundamental shift in the plane of practical solutions applied in the United States. The changes will be especially noticeable against the background of the experience of the year, during which there was a kind of flow of regulations and rules in the US. The new measures will be widespread. In this case, among other things, there will be changes in the practice of making decisions on credit card late fees and data sharing.
At the same time, the transformation of the regulatory approach does not automatically mean overcoming problems and difficulties and eliminating risks. In the context of risks, the most sensitive issue is the potential dangers associated with partnerships between banks and fintech companies. Also, in this case, it is worth mentioning the problems related to cybersecurity. The development of technology makes the activity of criminals in the virtual space more sophisticated. At the same time, technologies can also be a counteraction tool. Moreover, an effective means of combating cybercrime, which in most cases is aimed at stealing money, is the personal awareness of users. For example, an Internet search query such as how to know if my camera is hacked will allow anyone to get information about signs of unauthorized access to the device. Also, the reduction in regulation does not negate the fact that there are difficulties associated with the formation of the most acceptable capital requirements. Moreover, the issue of integrating various innovations in the financial sector remains relevant in terms of potential impacts, including in the context of security.
Unresolved cases also need to be resolved. For example, Synapse’s bankruptcy will have ripple effects next year.
According to industry experts, the tendency related to how partnerships are formed and how record-keeping could be redefined will be relevant in the coming months.
In the United States over the summer, a trio of federal banking regulatory agencies announced that they were considering additional moves aimed at ensuring financial institutions with the effective management of risks that could emerge as a part of the implementation of cooperation agreements between lenders and fintech companies.
It is not yet known whether the potential disbandment of some agencies will mean the transfer of their powers to other agencies in the case of the practical implementation of the relevant plans of the Donald Trump administration. It is obvious that the authorities must respond to risks and challenges, eliminating and suppressing which clearly will not be effective with a simple reduction in the scale of regulation. It is also worth noting that financial risks are a sensitive economic issue for the government of any country. In this case, a negative scenario means the loss of money by citizens and the state as a whole.
