We are providing a series of FinTech related presidential election discussions leading up to November 5th. To get things started, we’re examining the potential impact(s) of a Trump administration on our sector.
High-level thoughts on a Trump win.
The previous Trump administration was opposed to more regulation and outwardly critical of the Dodd-Frank Act (post financial crisis intended to bring more transparent disclosure to banks, limit risk taking, end “too big to fail” syndrome and lowered debit card processing fees). Ironically new regulations may have to be passed to undo previous statutes, which may imply congressional support (a difficult task). Consequently, the house and senate results will be just as important to a Trump Presidency’s legislative “hands off” approach.
What seems more certain is Trump’s anti immigration stance being a net negative for money services businesses (MSBs) which enable cross-border, person-to-person money transfers, particularly to countries south of the border. Beyond that, Trump has been explicit that he’s not opposed to protectionist policies which could play into investor capital flows, especially private equity with global allocations.
And, while Crypto receives a lot of media attention, in terms of revenue, it is but a small component of domestic FinTech, though a Trump presidency could offer regulatory relief and positive growth after years of uncertainty. If Trump were to be reelected, newly appointed regulators could interpret laws more favorably to support the nascent FinTech sector by providing more access to the banking system and loosening enforcement of consumer protections, and the agency of the CFPB.
