Changes to Come in Banking Regulation?

On July 9, 2021, President Biden issued an executive order that could spell changes for banking regulation.  The Executive Order’s stated purpose is to promote a “fair, open, and competitive marketplace” and the Order asserts that “in the financial-services sector, consumers pay steep and often hidden fees because of industry consolidation.”

The Executive Order promotes a “whole-of-government” approach to fostering competition and establishes a White House Competition Council to coordinate Federal efforts to combat overconcentration, monopolization, and unfair competition.  While the “whole-of-government” approach focuses on many aspects of market competition, the Executive Order directly addresses a few issues within the financial products and services market.

First, the Executive Order encourages the Attorney General, in consultation with the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency, to review current practices and adopt a plan, within six months of the order, “for the revitalization of merger oversight” in order to “ensure Americans have choices among financial institutions and to guard against excessive market power.”

In addition, the Executive Order encourages the Director of the Consumer Financial Protection Bureau (CFPB) to consider making rules “to facilitate the portability of consumer financial transaction data so consumers can more easily switch financial institutions and use new, innovative financial products.”  The CFPB Director is also encouraged to enforce prohibitions on unfair, deceptive, or abusive acts or practices in consumer financial products or services to ensure that wrongdoers “do not distort the proper functioning of the competitive process or obtain an unfair advantage over competitors who follow the law.”

Further, the Executive Order also instructs the Secretary of the Treasury to submit a report within 9 months of the order to the White House Competition Counsel on, among other things, the competitive effects created by the entry of non-bank companies and large technology firms into the consumer financial marketplace.

In more general terms, the Executive Order obligates all government agencies to further the policies of fair, open, and competitive marketplaces by “adopting pro‑competitive regulations and approaches to procurement and spending, and by rescinding regulations that create unnecessary barriers to entry that stifle competition.”


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