Minnesota business leaders are giving a mixed response to President Donald Trump’s effort to cut regulations on businesses and bankers.
Trump, at a White House signing ceremony Monday, said agencies should eliminate two regulations for every new one added. His order seeks to dramatically reduce regulations, but the policy will not apply to most of the financial reform rules introduced by the Obama administration through the Dodd-Frank Act.
Mike Zenk, CEO and founder of Bloomington-based Venture Bank, which makes mostly small business loans, said it makes sense to relax some of the regulations of the Dodd-Frank law passed after the financial system meltdown and federal bailout of 2008 to 2010. However, Zenk, who increased Venture’s loan portfolio by 20 percent last year, also expressed reservation over rapid-fire executive orders that might not have been thoroughly thought out by business and regulators.
“Certainly for community banks of $1 billion in assets or less, with the Dodd-Frank regulations there are [stricter] capital rules that are in place because the large money center banks were making bad investments in real estate and mortgages securities that they shouldn’t have made,” Zenk said. “All the regulations do is restrict us in how we can help customers grow their businesses.”
However, he added the speed of the president’s executive orders have confused and upset some.
“If an executive makes a decision, it needs to be well-thought out, well-planned, and determined how it will affect all stakeholders,” Zenk said.
The Minnesota Chamber of Commerce declined comment.
Trump’s chaotic first 10 days have been criticized by the CEO of Wall Street’s Goldman Sachs to other multinational businesses and human rights groups, particularly for the weekend-announced travel ban to the United States from seven Muslim countries.
And some small businesspeople, including Todd Mikkelson, owner of the RM Group in Orono, which makes the Sprayrack brand, said they are holding off hiring and investments until they figure out what Trump and Congress will do to the Affordable Care Act and other plans.
“We’re growing quicker than we anticipated,” said Mikkelson, whose business does architectural testing against the elements. “Our employees now can get health care [under Obamacare]. Beyond that, these unpredictable policy pronouncements of Trump … are not very clear and they are being questioned. I can’t understand some of it. Some of this could be a problem.”
Some businesses that employ immigrants say their employees are scared and confused, in the wake of some of Trump’s pronouncements about immigration, travel bans on several Muslim-majority countries that have led to disputes within the administration, and a sense of uncertainty that has led a stock market dip this week.
Dan Collison of the Minneapolis Downtown Council who is on a business-advisory committee for the city said it’s too early to interpret Trump’s order, noting that the primary concern of local business is local red tape and expense.
“It could be difficult to sort through the flow and trickle-down of federal, state and city regulations until we know more details,” he said in an email. “The group has been working with the city on ways to help small businesses avoid confusion by moving towards a one-stop regulatory system instead of requiring multiple stops at several city departments.”
Richard Revesz, director of the Institute for Policy Integrity at New York University School of Law, said in a statement to the Star Tribune that the wording of Trump’s regulations order is likely to cause “confusion and chaos.”
“It is also unclear how the order asks agencies to weigh costs,” Revesz said. “Some new regulations, such as energy-efficiency rules, are projected to generate cost savings for consumers.”
Environmental groups were also concerned.
CEO Jamie Rappaport Clark of Defenders of Wildlife called it a “disturbingly reckless rule” that puts people and wildlife at risk for no good reason.
“Federal rules and regulations keep our drinking water clean, our environment safe and our children healthy,” said Clark, who led the U.S. Fish and Wildlife Service during the 1990s. “Forcing an agency to get rid of two of its regulations every time it enacts a new one to carry out its mission to protect the public will only create chaos.”
Trump, a controversial real estate developer and manager who used bankruptcy laws several times to avoid croporate obligations, later used a reality TV show to build his notoriety and success as a promoter of the Trump brand on buildings, steaks and a private university that later was sued by regulators.
“Regulation has been horrible for big business, but it’s been worse for small business,” Trump said, noting that small businesses cannot hire the talent and compliance personnel that larger businesses do. “There will be regulation, there will be control, but it will be a ‘normalized control’ where you can open your business and expand your business very easily and that’s what our country has been all about.”
He said he hoped to eliminate 75 percent of government regulations.
The White House Office of Management and Budget will need to review the proposed regulations, as agencies identify what two regulations will be repealed to offset the costs of any new rule.
Includes reporting by the Washington Post and Reuters.