IMPACT OF THE ELECTION

Following this week’s election we all need to evaluate the impact on our lives, families, and our businesses. Change is definitely coming, but will not happen overnight. If you have a positive view of the future I hope your vision comes true. If you are fearful of the future I hope your fears are unfounded. We need to closely watch the actions of Congress and the White House over the next few years to judge the true direction of the nation.

Changes in the Parties

Both major parties need to perform some serious self-evaluation following the election.

The Democrats lost the White House, Congress and control in a number of states. The Party is losing many of their traditional constituencies. Without change the Party will continue to lose relevancy.

The Republicans also have challenges. Many of the Party’s traditional leaders did not support, some even openly opposed, President Trump. The Party needs to find unity quickly in order to build on the mandate provided by the election.

Impact on the banking industry

Based on results from the past two days the stock market seems to believe the changes are positive for the banking industry. The impact on the compliance segment of the industry is not so clear.

The campaign promise to repeal the Dodd-Frank Act is not likely (It gets messy when you try to put toothpaste back in the tube). Major changes to various aspects of the law are expected. We suspect that Director Cordray will have to answer to a board of directors in the future. We expect that a Republican controlled Congress will slow the pace of new laws entering the compliance pipeline. While the fate of laws and regulations that are in the pipeline now is not certain, we expect the implementation of those laws and regulations to continue over the next few years. We will monitor each of the Federal Regulatory agencies to gauge any changes in the level of enforcement.

In my forty year career I have seen the compliance pendulum shift numerous times from a level of high intensity to levels of lower intensity. The pendulum keeps moving, but compliance doesn’t go away.

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