Wednesday, November 23, 2016


Appeal to Trump:
Don’t decimate
Financial rules

THERE IS TALK — how much is accurate I won’t speculate — that president-elect Trump is going to wipe out a number of laws and rules that (try to) govern America’s financial efforts.

Eliminating many rules and regulations, it is posited, will encourage more investment and therefore expand employment.

The problem is, the rules and regulations were put into place because of abuses by the people controlling America’s financial efforts.

Sans rules and regulations, anarchy will replace any semblance of order in American business. It will be turning the fox loose in the hen house.

I consider myself a conservative and a “state’s righter” so I rarely welcome what I perceive to be restrictive rules and regulations, be they legislated or promulgated by executive fiat, as was Obama’s wont.

I also consider myself a realist who lost faith in fair play in business (and politics) probably before I know what “fair play” meant.

Admittedly some rules and regulations are outdated and need to be either revised, replaced, or consigned to the dust bin of history

Certainly not all business people and not all politicians are crooked. As a kid in junior high I learned that ”All generalities are lies.” which, of course, is a generality. The point being that people are individuals who can do some good things and some bad things, but most people are neither all good nor all bad. That includes business people and — although after the recent presidential campaign it may be hard to accept — politicians.

Temptation to push the boundaries of good, fair business practices — through bribery, misleading statements and documents, outright lies, and taking advantage of the innocent (as Wells Fargo recently admitted to doing) — always has been, and always will be with us.

Temptation is the reason many of the finance-related rules and regulations were put into place. If humans never gave into temptation there would be no need of breast beating in most of the religions of the world.

As a risk management practitioner I got to know a little about the Foreign Corrupt Practices Act of 1977 (FCPA), a little about Federal banking rules and regulations and the Federal Financial Institutions Examination Council. These rules and regulations don’t cover everything — “charities” for example.

There are rules and regulations about driving; violate them and pay a fine or go to jail. The laws are there to protect the public from dangerous drivers – the kinds who run red lights with impunity and travel at unsafe speeds. When the laws are violated, the miscreants, if caught, are punished.

Laws are necessary to keep the financial foxes out of the chicken coop and to at least pretend to punish those who violate the laws and the public’s trust.

Bottom line: Mr. Trump, we need strong, enforced financial industry regulation, not less of it. Please don’t turn the financial chicken coop over to the foxes.

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