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Wall Street Lobbyists Decide Against Pushing Trump for Specifics—for Now

Representatives from the nation's largest financial institutions met in Washington last week and discussed the Republican Party’s presumptive nominee.

The banking industry is flummoxed on what to do about Donald Trump, even as their fears grow that his likely opponent has moved too far to the left.

Last Tuesday, Trump announced plans to unveil an alternative to the 2010 Dodd-Frank Wall Street Reform Law in the coming weeks—just as Representative Jeb Hensarling, who chairs the House Financial Services Committee, is putting the finishing touches on his own proposal.

The announcement caught the industry—which has spent months pressing lawmakers in hopes of defining the debate surrounding financial services regulation—off guard, suggesting that one of the most powerful lobbying networks in the nation is struggling to come to terms with the brash billionaire's G.O.P. takeover.

At a private meeting last week in Washington, representatives from the largest financial institutions in the nation discussed Trump's candidacy at a gathering that focused on the latest developments on Dodd-Frank and Hensarling's proposal. 

A few key questions emerged: Would Trump's agenda be aligned with the forthcoming proposal from Hensarling and House Speaker Paul Ryan? And should they reach out to Trump's campaign staff to inquire about his economic agenda?

According to two people who attended the meeting, the group decided against reaching out after several representatives expressed fears that Trump could criticize them on social media if talks took a bad turn.

Because of that, the executives decided to take a more measured approach.

"It's hands off, for now," one of the attendees said. "We're not 'Never Trump,' we're just not ready yet."

The attendees said that the banking industry is equally as tepid about reaching out to Hillary Clinton's campaign regarding her economic agenda, particularly as she has sought to demonize Wall Street and big business during a drawn-out primary fight with Vermont Senator Bernie Sanders, who has routinely called for breaking up the big banks.  

The dueling tensions brought on by Clinton's attacks and Trump's lack of specifics explain why leaders at the Financial Services Roundtable (FSR)—which represents the leading Wall Street and Main Street financial firms—launched a Presidential Focus Series, details of which were shared with Bloomberg ahead of its official release on Tuesday. Each week leading up to July's political conventions, the group will attempt to press candidates on various issues important to the financial services industry. They range from housing finance reform, retirement policies and youth financial literacy.

"This is the moment where we all need to make the pivot from the primary to the general election," said FSR executive director Eric Hoplin. "A lot of people were surprised by the Trump phenomenon. Now we're all starting to get used to it."

Larry Kudlow, a former Reagan administration budget official who has advised Trump on financial matters, had no problem with Wall Street lobbyists feeling anxious. 

"You know, maybe some of these K Street folks—nice people, but they should be a bit quaking in their boots. I don't have a problem with that. If they have muscle sores, I'll give them a tube of Icy Hot that they can rub in on their feet. But let 'em quake," said Kudlow.

Kudlow, who met with Trump last week in Washington, predicted that most of the financial services people are "going to come around, even if they're against him right now."

In a Wall Street Journal poll released on Monday, general election voters believe by large margins that Trump would do a better job dealing with Wall Street and shaking up Washington.

One particular industry that doesn't have any issue with Trump's messaging is credit unions, which are traditionally smaller in size than banks. Leaders at the National Association of Federal Credit Unions (NAFCU) have argued for years that the Dodd-Frank regulations shouldn't be applied to credit unions, which they contend played no role in the economic collapse. Both Hoplin and NAFCU president and CEO Dan Berger said that their organizations have been in contact with all of the campaigns, including Trump.

"We like to hear the broad messaging coming from both Clinton and Trump about Main Street versus Wall Street," said NAFCU president and CEO Dan Berger. "We love that messaging all day long. Now, if they could just start giving a little more specifics—like with data security—we'd love that even more."

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