May 11, 2017
Trump’s New Bank Regulator Offers First Gift to Wall Street, Pushes to Undo Crucial Volcker Rule
Statement of Lisa Gilbert, Vice President of Legislative Affairs, Public Citizen
Note: On May 3, President Donald Trump named financial industry lawyer Keith Noreika as Acting Comptroller of the Currency, replacing Thomas J. Curry, who stepped down effective May 5. In an interview with The Wall Street Journal published on May 11, Noreika said banking regulators could grant exemptions for types of trading activities currently barred under financial reform legislation passed in 2010. The Volcker Rule, approved as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, prohibits banks from engaging in activities that conflict with customers’ interests.
Another Trump appointee is delivering for his former corporate buddies.
Acting Comptroller Keith Noreika’s comments are yet another sign that the Trump administration is taking the side of Wall Street rather than Main Street. The Volcker rule bars banks from attempting to profit the way speculators do – through the frequent purchase and sale of securities.
It is disturbing that, after only a few days on the job, Trump’s appointee is floating ways to weaken public protections disliked by the big financial institutions he formerly represented.
As the Volcker rule requires, banks should restrict themselves to the business of banking, or traditional loan-making with funds they borrow from depositors. Using those funds to take risks is inappropriate and exactly what the Dodd-Frank Act was created to prevent.
Further, we question why Trump is circumventing the Senate confirmation process to install Noreika to run the Office of the Comptroller of the Currency. It raises additional questions about his conflicts.