Banking and finance experts optimistic but cautious regarding new administration’s impact 

The banking and finance industry could see gains under the incoming federal administration, those in the field say, with President-elect Donald Trump’s proposed plans of a lower-interest-rate environment coupled with lighter regulatory oversight on the horizon.   

They also note, however, that many proposals may never come to fruition or take some time before their impacts are felt. And others may just be bad for business.   

Managers at Canandaigua National Bank & Trust in the Rochester/Finger Lakes region of New York said the new administration could bode well for businesses.   

“Trump’s policies should help businesses in general,” said Brendon Crossing, senior vice president and group manager for the commercial services team at CNB.   

Both he and Kevin DiGiacomo, also a senior VP and group manager for the commercial services team at CNB, expect some benefits, but they noted it may take time for the changes to be enacted.   

Heading into the election, some business owners were hesitant and even paused projects because of high interest and construction rates, Crossing explained, although CNB has continued to see robust loan demand in the local ecosystem.   

There has been some relief since the election, with interest rates trending downward, he noted, which should positively impact the commercial sector moving forward.   

“I’d expect increased demand (in lending) as the rates trend downward,” Crossing said.   

DiGiacomo added that the first few months of the new administration will likely be more talk about what it would like to accomplish rather than action, since some changes require Congressional approval.   

Like his colleague, DiGiacomo sees Trump’s plans to lower corporate taxes and deregulate banks as positives for businesses.  

In the meantime, he advises clients to be flexible and nimble with their plans.  

“React accordingly and be ready to move when we see where the policies are going,” DiGiacomo said.   

Mary Ann Scully, dean of the Sellinger School of Business at Loyola University of Maryland in Baltimore, said there are many unknowns at this point as to what policies will be implemented under the new administration.   

As a business dean and former banker — Scully co-founded Baltimore-based Howard Bank and served as its chairperson and CEO until the bank was sold in 2022 — the two areas she is most interested in from a banking and finance perspective are tax and regulation policies.  

Extending the provisions in the 2017 Tax Cuts and Jobs Act (TCJA) — which are set to expire at the end of 2025 — would help create a stable environment at the onset, she said.   

“In the very short term, tax cuts are almost always good for business,” Scully said, but noted that tax cuts in an environment where there is already a steep budget deficit could lead to medium- to long-term problems, including adding to the deficit or a weaker U.S. dollar.   

Deregulation could also be a good thing for banks, she said, adding that it could increase mergers and acquisition activity, which is an area that has been constrained the past few years.   

More indirectly to the sector, but areas she is also watching, include proposed tariff increases and deportation plans.   

Scully has some concerns about Trump’s tariff proposals, noting they could have ramifications in terms of the cost of goods purchased.   

As a result, importers may feel some pressure to raise their prices, which could then impact inflation, she explained.   

On the deportation side, Scully sees additional challenges, particularly for the agriculture and construction industries who are concerned about losing their workforce.  

While nothing has been decided yet, Scully said she wouldn’t be surprised if some of the incoming administration’s proposals came to fruition swiftly, given the Republican majority at the federal level of government.   

“There is a strong probability that things may happen more quickly than we anticipate,” she said, adding that a good indicator of how unified the Republicans are will be seen during the cabinet appointment process.   

While it all plays out, Scully advises small- to mid-sized businesses to focus on risk management, continue to develop good products and services, take care of their customers and treat their employees well.   

“Stay the course,” she said.   

J.P. Morgan Private Bank — the global private banking division of JPMorgan Chase & Co. — shared its 2025 economic outlook, which includes a section on understanding the impacts of the 2024 U.S. election.   

The outlook notes that deregulation, increased M&A activity, a focus on domestic economic outcomes and the slim chance of lower corporate tax rates provides the bull case.   

Additionally, the immediate market reaction to the U.S. election results showed that investors are favoring the U.S. over the rest of the world, along with small-cap stocks and regional banks.  

“However, pro-growth initiatives could also lead to higher inflation and wider budget deficits,” according to the outlook. 

Jess LeDonne is director of policy and legislative affairs at The Bonadio Group, a national accounting and advisory firm based in Monroe County, New York, with additional locations across New York and in Maryland, Vermont, Virginia and Texas.  

She said with the results of the 2024 elections now in, organizations are left wondering what a Republican administration will mean for their businesses.  

Patience and preparation are key, she said, noting businesses should not be too reactionary, given that we are in a “wait and see” period.   

LeDonne said it’s hard to give a thumbs up or down on the incoming administration’s proposals, noting there are some that are advantageous for businesses and some that are less so.  

They are, however, proposals at this point and even if they do go before Congress, the Republicans only have a slim margin in both houses so getting them through may be more challenging than some expect, LeDonne noted.   

“What they want to do may not be as grand as what they have been promising,” she said.   

That said, the incoming administration’s proposals, if enacted, will likely have day-to-day impacts on businesses, LeDonne added.   

One area that could impact businesses is regulatory and compliance changes, with the incoming Republican administration expected to prioritize deregulation across the financial sector, aiming to reduce compliance burdens and stimulate economic growth.   

Tax policy changes are likely to focus on reducing rates and extending provisions favorable to the financial sector, another plus for businesses, she noted.   

LeDonne said, however, that the Republican-led Congress may have a goal of keeping inflation at bay, which could continue the trend of higher interest rates.   

Additionally, there could be some challenges with the cost of doing everything the incoming administration wants to do, especially when it comes to tax cuts, she said, noting it could lead to a deficit on a trajectory that is not sustainable.   

“The proposals come with a huge price tag,” she said.   

Another area LeDonne is watching is the impact on businesses of the tariff increases Trump has proposed, especially since it is an area where the president-elect may have more unilateral power to make decisions versus other policies.   

She believes it’s important to look at a company’s supply chain and where they are sourcing from, noting companies could see a big cost increase in those imports if the proposed tariff increases are enacted.   

LeDonne also advises businesses to keep an eye on changes to the corporate tax rate — which should be lowered under the new administration’s proposals — and plan accordingly.  

Additionally, businesses should look at federal programs they may be using when it comes to research and development efforts and energy credits that they have received through the Inflation Reduction Act and be aware that they may sunset or even be eliminated by the incoming administration.   

“These could be on the chopping block in order to pay for other tax cuts,” she said.  

Andrea Deckert is a staff reporter for the Rochester Business Journal. Contact her at [email protected] / (585) 653-4021. 

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