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Under Trump, Banking Watchdog Trades Its Bite for a Tamer Stance - ABI

After the financial crisis in 2008, the Obama administration turned one of the banking industry’s friendliest regulators into one of its toughest. But that agency is now starting to look like its old self — and becoming a vital player in the Trump administration’s campaign to roll back regulations, the New York Times reported. The regulator, the Office of the Comptroller of the Currency, which oversees the nation’s biggest banks, has made it easier for Wall Street to offer high-interest, payday-style loans. It has softened a policy for punishing banks suspected of discriminatory lending. And it has clashed with another federal regulator that pushed to give consumers greater power to sue financial institutions. The shift, detailed in government memos and interviews with current and former regulators, is unfolding without congressional action or a rule-making process. It is happening instead through directives issued at the stroke of a pen by the agency’s interim leader, Keith A. Noreika, who — like the nominee to fill the post going forward — has deep connections to the industry. Even in his few months on the job, Noreika has made the new direction clear. At a meeting with staff members over the summer, he declared that the agency was returning to what he called its natural state, according to one of those who attended. The shift could help revive some of the policies and practices that arose on the agency’s watch amid the financial crisis and banking scandals of a decade ago — and that led congressional investigators to accuse it of “systemic failures.”

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