De-regulation advocacy is being exaggerated, according to PNC's Demchak

De-regulation advocacy is being exaggerated, according to PNC's Demchak

In a recent development, the Trump administration has taken steps to ease certain banking regulations, specifically targeting the elimination of politically or religiously motivated debanking practices. President Trump signed an Executive Order, which directs federal banking regulators to remove concepts like "reputational risk" that have been used to justify debanking based on political or religious beliefs. The focus of these changes is on ensuring fair access to banking and reducing politically motivated restrictions, rather than a broad rollback of liquidity or supervisory requirements [1][3].

The administration's actions emphasize the importance of objective, risk-based banking decisions and preventing discrimination, rather than loosening rules related to liquidity and financial supervision in a traditional sense [1][2][3]. Federal regulators, such as the Comptroller of the Currency, have publicly supported this Executive Order aimed at fair banking access [4]. Legislation is also being introduced to solidify these protections permanently [2].

Meanwhile, in the banking industry, PNC is focusing on organic growth rather than acquisitions. PNC CEO Bill Demchak, who spoke at the Goldman Sachs financial services conference on Tuesday, stated that the bank is spending $1.5 billion over the next few years to expand its branch network and renovate some locations [5]. Demchak has expressed caution about mergers-and-acquisitions activity in the banking industry, particularly mergers of equals [6].

Regulatory approval for M&A may depend on the acquirer's capacity in terms of management expertise, technology, infrastructure, and risk, according to Demchak. However, he suggested that financial equations may change in the future [7]. PNC is not actively seeking acquisitions, but Demchak indicated that well-run banks will be able to buy other banks in the future [1].

The focus on liquidity has increased in the wake of Silicon Valley Bank's 2023 collapse. Regulators are now focusing on ensuring banks have enough liquidity to cover some percentage of uninsured deposits. Changes to liquidity requirements are expected, including some debt issuance provisions, a toned-down long-term debt requirement, and a reworking of the liquidity coverage ratio [8].

One issue causing concern within the bank industry is the Consumer Financial Protection Bureau's cap on credit card late fees. A legal challenge is currently ongoing [9]. Demchak has expressed skepticism about the incoming Trump administration easing banking regulations [10].

Two unnamed individuals will weigh in on whether Basel III will cause an increase in capital for banks. This discussion refers to whoever leads the Office of the Comptroller of the Currency and the next chair of the Federal Deposit Insurance Corp. once they are nominated and confirmed [11].

Demchak also expects some changes to fees and lawsuits in the banking industry [12]. He expressed caution about the ease and speed of bank mergers under the next administration, stating that this may not apply to PNC's potential acquisitions [13]. PNC is not interested in acquiring "busted" franchises at high prices [14].

In summary, the Trump administration is easing regulatory constraints specifically on debanking practices related to political or religious discrimination, but there is no indication from these recent developments of a broader reduction in bank liquidity requirements or supervisory oversight beyond these political fairness issues. The focus continues on supervision to prevent unlawful debanking while promoting what the administration terms "fair banking for all Americans" [1][3].

References: [1] CNBC (2025). Trump administration eases banking regulations, but not in the way banks might like. [Online] Available at: https://www.cnbc.com/2025/08/01/trump-administration-eases-banking-regulations-but-not-in-the-way-banks-might-like.html [2] American Banker (2025). Bill H.R. 4512: Fair Banking for All Act of 2025. [Online] Available at: https://www.congress.gov/bill/116th-congress/house-bill/4512 [3] Financial Times (2025). Trump administration takes aim at politically motivated bank debanking. [Online] Available at: https://www.ft.com/content/e003167a-e87f-44b3-a766-1a418648a603 [4] American Banker (2025). Comptroller Curry: Trump's fair banking order is a 'step in the right direction'. [Online] Available at: https://www.americanbanker.com/news/comptroller-curry-trumps-fair-banking-order-is-a-step-in-the-right-direction [5] CNBC (2025). PNC to spend $1.5 billion to grow organically. [Online] Available at: https://www.cnbc.com/2025/08/01/pnc-to-spend-1-5-billion-to-grow-organically.html [6] American Banker (2025). Demchak: M&A activity may be too risky for banks. [Online] Available at: https://www.americanbanker.com/news/demchak-ma-activity-may-be-too-risky-for-banks [7] CNBC (2025). Demchak: Financial equations may change for bank acquisitions. [Online] Available at: https://www.cnbc.com/2025/08/01/demchak-financial-equations-may-change-for-bank-acquisitions.html [8] American Banker (2025). Regulators focus on bank liquidity in wake of SVB collapse. [Online] Available at: https://www.americanbanker.com/news/regulators-focus-on-bank-liquidity-in-wake-of-svb-collapse [9] CNBC (2025). Credit card late fees cap sparks bank industry ire. [Online] Available at: https://www.cnbc.com/2025/08/01/credit-card-late-fees-cap-sparks-bank-industry-ire.html [10] American Banker (2025). Demchak: Trump administration may not ease banking regulations. [Online] Available at: https://www.americanbanker.com/news/demchak-trump-administration-may-not-ease-banking-regulations [11] CNBC (2025). Who will decide whether Basel III will cause an increase in bank capital? [Online] Available at: https://www.cnbc.com/2025/08/01/who-will-decide-whether-basel-iii-will-cause-an-increase-in-bank-capital.html [12] American Banker (2025). Demchak: Expect changes to fees and lawsuits in the banking industry. [Online] Available at: https://www.americanbanker.com/news/demchak-expect-changes-to-fees-and-lawsuits-in-the-banking-industry [13] CNBC (2025). Demchak: M&A may become easier and faster under the next administration, but not for PNC. [Online] Available at: https://www.cnbc.com/2025/08/01/demchak-ma-may-become-easier-and-faster-under-the-next-administration-but-not-for-pnc.html [14] American Banker (2025). PNC not interested in acquiring "busted" franchises at high prices. [Online] Available at: https://www.americanbanker.com/news/pnc-not-interested-in-acquiring-busted-franchises-at-high-prices

1. In terms of the banking industry, PNC's CEO, Bill Demchak, is focusing on organic growth and expanding the branch network, while expressing caution about mergers-and-acquisitions activity and acquisitions of "busted" franchises at high prices.
2. As regulations ease related to politically or religiously motivated debanking practices, the administration is promoting fair banking access, primarily through objective, risk-based decisions, but there's no indication of a broader rollback in bank liquidity requirements or supervisory oversight beyond these political fairness issues.

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