Last month, President Biden announced the end of his presidential reelection campaign. This move not only changed the dynamics of the 2024 presidential race but also opened the door for new ideas and political agendas — some of which will directly impact your finances.
With fewer than 70 days until voters head to the polls, Republican presidential nominee and former President Donald Trump and Democratic presidential nominee and current Vice President Kamala Harris have been laser-focused on gaining support from voters, sharing some of their key policy initiatives as we approach Election Day.
It should be noted that Harris was confirmed as the Democratic nominee less than a month ago. So, many of her policies and plans have yet to be formally revealed.
Still, both candidates have shared ideas about what they envision for the next four years. And the next president will undoubtedly have a major influence on your financial life and the banking industry as a whole.
4 ways the next president could influence banking
We can’t predict how the election will play out, but we can examine each candidate’s statements around banking and finance to surmise how their policies may impact Americans’ wallets if elected.
Banking regulation
Trump and Harris differ on many issues, and banking regulation is one of them.
Trump favors a more relaxed approach; he will likely work to reinstate his deregulation policies that were originally signed into law in 2018. The legislation was meant to ease regulatory rules and requirements placed on small and medium-size institutions by the Dodd-Frank Act, which aimed to curb risky lending practices and increase bank oversight in light of the 2008 financial crisis.
"President Trump's pro-growth, deregulatory agenda ignited the greatest economy in history,” wrote Karoline Leavitt, national press secretary for the Trump campaign, in an email to Reuters.
However, critics have claimed that this deregulation has weakened the stability of the banking industry and led to recent bank failures like that of Silicon Valley Bank.
The Biden-Harris administration has pushed to reinstate “common sense” banking oversight, and Harris has a track record of voting against deregulation. However, while her campaign speech, which revealed her economic agenda, focused on plans to tackle price gouging, housing issues, capping prescription drug costs, and a new child tax credit, she did not mention a plan to address banking regulation specifically.
Read more: How do banks make money?
Bank fees
Between 2018 and 2020, Americans paid roughly $120 billion per year in credit card interest and fees, according to the Consumer Financial Protection Bureau (CFPB). That translates to an average of $1,000 annually for each American household.
Under the Biden administration, Harris has had a hand in tackling junk fees by capping credit card late fees and banning fees for essential bank account services, such as checking bank account balances, obtaining a payoff amount for a loan, or getting account information needed for applications.
Bank fees haven’t been a central topic in the current presidential race, and Trump has not said much about whether this will be a priority for his administration if elected. However, looking at Trump’s first term as president, it appears he favored leaving bank fee decisions in the hands of banks.
Read more: What are bank fees, and how do I avoid them?
Interest rates
The federal funds rate has been a major topic of discussion since the post-pandemic inflation rate reached a 40-year high and led to sharply increased costs for goods and services.
In an effort to control inflation, the Federal Reserve can raise or lower its target rate to influence the cost of everyday goods. The federal funds rate also influences the interest rates banks offer on savings accounts, credit cards, and loans.
Ultimately, the federal funds rate isn’t set by any one individual. The Federal Open Market Committee (FOMC) meets multiple times throughout the year to evaluate key economic indicators, gauge the overall health of the economy, and determine whether or not a rate change is appropriate.
While the president can nominate key Fed officials, appoint the chair, and discuss concerns related to monetary policy, presidents do not directly influence the Fed’s rate decisions.
But Trump has stated he believes the president should have a greater say in setting interest rates. “In my case, I made a lot of money, I was very successful, and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman,” the former president said during a recent press conference.
Harris countered this statement by saying, “the Fed is an independent entity, and as president, I would never interfere in the decisions that the Fed makes.”
Read more: How much control does the president have over the Fed and interest rates?
Cryptocurrency
Cryptocurrency is decentralized, meaning it isn’t backed by a central bank, agency, or government. This autonomy has been a major selling point for crypto enthusiasts who distrust traditional financial systems. On the other hand, some experts believe cryptocurrencies lack important safeguards, leaving users at risk and opening up the door to increased illegal activity.
Harris has yet to make an official statement about whether cryptocurrency legislation will be part of her platform. However, a policy adviser to her campaign said Harris will back measures to help grow digital assets during a Bloomberg News roundtable at the Democratic National Convention.
In the past, Trump referred to cryptocurrency as a scam. However, he has seemingly changed his mind, now holding an estimated $1 million in digital currency. In its official 2024 policy platform, Republicans vow to “end Democrats’ unlawful and unAmerican Crypto crackdown” and “defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control.”
It may come as no surprise then that crypto companies account for nearly half of the corporate money contributed to this year's races, according to data from consumer rights advocacy nonprofit Public Citizen. Both candidates have been seemingly open to supporting regulatory frameworks and growth within this industry; the next president’s approach to crypto could shake things up in the banking sector and encourage more Americans to move toward digital currencies as an alternative to traditional banking.
Read more: Is this a good time to invest in bitcoin?