Guest: Jaret Seiberg, Managing Director, Washington Research Group - Financial Services Policy Analyst, TD Cowen
Host: Scott Smith, Managing Director and Head of Financial Services Specialty Sales, TD Securities
The financials sector was one of the biggest beneficiaries of the early expectation of and ultimately the re-election of Donald Trump, and banks are the best performing sector so far in 2025. De-regulation expectations are driving part of that performance, so we dig in with Jaret Seiberg the head of Financials Policy at TD's Washington Research Group on how the Trump 47 administration could change regulation, or not…This is the inaugural TD financial services podcast hosted by Scott Smith TD's US Financial Services Specialty Salesperson with guest Jaret Seiberg, TD's head of Financials, Housing and Crypto Public Policy at TD's #1 ranked Washington Research Group in the Extel Survey.
Listen to additional podcast episodes for more perspectives from a variety of thought leaders on key themes influencing markets, industries and the global economy today.
This podcast was originally recorded on January 22, 2025
Speaker 1:
Welcome to TD Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.
Scott Smith:
Hello, I'm Scott Smith. I'm the financial services specialty salesperson in the US for TD Securities. And happy to welcome to the Inaugural Financial Services Podcast, Jaret Seiberg from TD Cowen's WRG Group. Jaret, welcome.
Jaret Seiberg:
I'm happy to be here, let's have some fun.
Scott Smith:
So Jaret, well, I knew initially I was going to start with your sort of year ahead piece, but you just said something that really caught my attention in one of the many podcasts that we're going on earlier today, which was this is day three of the Trump administration, and Rohit Chopra is still the director of the CFPB. What do you make of that?
Jaret Seiberg:
I think it's just a good reminder that what's important to Trump is important to Trump, and that's not necessarily what's important to everybody in the market. And he has distinct priorities and we know him. He doesn't want to pay taxes, so tax reform and extending his tax cuts is critical. He views tariffs as a way to exert power. And so tariffs are important. Almost everything else is secondary. And I think that's the only way you can explain how Rohit Chopra is still in charge of the CFPB and why we haven't heard anything about the OCC, which regulates all the national banks.
Scott Smith:
Yeah, I know all of us in financials tend to think of ourselves as the center of the universe, and certainly the stocks reacted to a Trump 2.O, initially with the view that we were going to be in some sort of regulatory perfect storm on the plus side. And so you don't think this is anything more than he'll get around to it and not a nod that there may actually be a more populist administration than people may have priced in?
Jaret Seiberg:
Well actually Scott, I think it's both of those things, right? I do think the market under appreciates how Trump 2.0 is far more populist than Trump 1.0. And I think that's going to bleed through in a whole bunch of different policies, whether it's bank merger reviews, whether it's pressure on interest rate caps, pressure on fees, a lot of the same populist anger that drove Rohit Chopra is going to drive Team Trump. But that does not mean that Rohit Chopra is going to be piloting the ship. I see, as close to a zero probability of that as you can get, and probably by the time this podcast is released, we will have a acting Republican CFPB director.
Scott Smith:
All right, great. Well, there's a bunch of things I do want to circle back there on with respect to a couple of those things. But looking back at your 2025 outlet piece, there were a hundred and what was it, 50 items that you highlighted? It sort of struck me, it's taken me a long time to get through it all, so do you want to provide the listeners a couple of minutes on the highlights of what you were focused on?
Jaret Seiberg:
Yeah, sure. So Scott, I thought we could all go through all 150 items in detail and then have a quiz at the end. Does that work for you?
Scott Smith:
Yeah, we'll schedule the next podcast for a week from now on when we're done with that.
Jaret Seiberg:
No, I would say that I think you can really narrow the list down to a couple of big picture items. I think that when it comes to rule writing, the rule writing process is going to be much slower than the market's expecting. You can't just snap your fingers and say, oh my gosh, I want that rule to go away. Because just like the banks were very successful in suing in the Fifth Circuit to get Biden error rules overturned, while consumer advocacy groups are going to file in the Ninth Circuit in California to prevent those rules from being undone. And so with the threat of litigation, it's really important that Team Trump follows the Administrative Procedures Act, and that means dotting every I and crossing every T.
And that just takes time. And so I think that's one big theme to watch. The second kind of big issue is the populism that we were joking about a couple of minutes ago. Trump is more populous and part of his MAGA coalition is very populous. JD Vance has been an opponent for regional bank consolidation, it's an issue with big tech. And so when we think about financial rules and we think about consolidation and what the regulatory environment might be like, you need to keep in the back of your mind that this is not your typical Republican administration. And so there's far more risk than when George Bush was president or Ronald Reagan was president.
Scott Smith:
Where do you think investors have been the most off size with respect to what they thought was going to happen versus what you think might actually be the outcome?
Jaret Seiberg:
I think there's probably two areas. The first is on M&A. There are enormous expectations for how quickly we're going to see regional bank consolidation and how much easier the process is going to be. And I think there's two fundamental problems there. The first is the biggest impediment to regional bank consolidation is the fact that we don't have pooling accounting anymore. And that means you have to mark the target to market. And with unrealized losses on AFS securities being pretty high at a lot of the regional banks, that makes doing a deal extraordinarily expensive and very difficult.
That should start to ease over the next year or two. But it does mean that at least in the near term, there are some real market obstacles to an acceleration of deal-making. And then there's the reality of the process, right? I was just talking about this with deregulation. And the same is true for consolidation. Bank merger applications have to be reviewed. There are going to be Community Reinvestment Act hearings, and it's just not a quick process, so maybe we reduce it from 14 months to 12 months, but that's still not three or four months that I feel like some folks are really expecting.
Scott Smith:
Got it. One of the other ones that's popped up for us has been capping the fees or capping the interest rate on credit cards. You started talking about this way back when Josh Hawley, I think it was first kind of proposed the Republican side of it, and I think that was 18%, but I'll let you carry the narrative. And then somehow or another became 10% under Trump. And I think most of us were very dismissive of it, but between Trump and Vance and Hawley, and now you've even had Bessent mention it once or twice, why does it keep coming up? Is there any risk to this happening?
Jaret Seiberg:
Yeah, it keeps coming up because if you're somebody who's actually paying interest on your credit cards, so you're unable to pay off that balance each month, that interest rate hurts, right? That's a big payment, you're making. The CARD Act, which passed in the early aughts. If you look at it, it tells you how long it would take you to pay off your credit card if you just made the minimum monthly payment. And that can be many, many years. And that's because of the interest rate. And so for a lot of these working people who propelled Donald Trump to victory, credit card debt is one of their biggest economic concerns. And I think Trump recognizes that. I think it's why he keeps talking about it.
Now, do I think we really get a 10% interest rate cap? I mean, I hope not. That would be terrible for credit creation. Credit card lines are going to get withdrawn or shrunk. It's going to radically change the market. But what I think he's really trying to do, and it goes back to what we say about Trump all the time, which is take Trump seriously, but not literally. He doesn't literally want to cap interest rates at 10%, but what he does want is credit card companies to think twice about increasing rates even further and to start to think about cutting rates as the Federal Reserve cuts rates.
Scott Smith:
Keeping with credit card for a minute there. Jaret, at one point, obviously, I guess currently we're still hearing Donald Trump talk about no taxes on tips, which has got some implications for how cards are processed. But at one point Illinois was talking about you aren't going to be able to collect interchange on any of a number of different things. Are we done with that? Is that over?
Jaret Seiberg:
No, I think there's two gifts that keep on giving for me in this business. One is Fannie and Freddie, and the other is interchange, right? The interchange fights have been going on since the early 1990s. They continue, the latest fight is really on three fronts. You have litigation in Illinois over a state law that restricts or bans the charging of interchange fees on taxes and tips. A federal judge issued a preliminary injunction to help national banks and some Illinois banks, but it doesn't apply to the entire industry. And so that fight is still ongoing. Senator Durbin is still pushing his dual routing requirement for credit cards, which is just a backdoor way to create chaos with credit card interchange and try to lead to the Federal Reserve regulating credit card interchange. And then lastly, you have the Federal Reserve looking to overhaul the debit interchange rules in a way that could cut debit interchange fees by 30%, so is there a lot happening here? And I think the election, it just means that this fight is not over, and I expect we're going to hear more about it over the next two years.
Scott Smith:
Continuing on about credit card a little bit further, for folks listening, we're recording this on the 22nd of January. That is the day we had Capital One report earnings yesterday, we have Discover reporting tonight. You were early suggesting Capital One and Discover was going to be just fine in terms of an M&A transaction. You still think so?
Jaret Seiberg:
Yeah, there's nothing that has emerged to suggest that the deal is in trouble. I think that the ultimate problem here is some policymakers may not like this combination, but not liking a combination is not the same as the combination being illegal. And if you look at how the antitrust laws apply to market definitions, it's very difficult to see how you would define a market where Discover and Capital One would have monopoly powers and where other credit card providers wouldn't be able to come in and compete. There're simply no entry barriers to companies that are now prime or near prime from moving further down into near prime to subprime, so I think that finding an antitrust argument is challenging.
On the other side, on the safety and soundness side, I mean, Capital One is a well-managed bank. It has financial capabilities, it has a strong management team, and so the factors that the Fed has to look at, it's also very difficult to see how they could deem the bank to be out of compliance in a way that could result in the deal being stopped. And so to me, there may be policymakers who want to stop the deal, but the law is just not on their side.
Scott Smith:
Jaret, a minute ago, you referred to your other annuity in your space, which is the GSEs. I took a look this morning. Fannie and Freddie are up in order of magnitude more a year to date than anything else in financials. I guess technically not entirely true for Capital One, Discover, Ally and Carlisle I guess, but in general, 10 times more than anything else. You have been somewhat skeptical, if I'm correct in calling it that way, about the GSEs kind of coming out, certainly in the near term. What do you think is going to happen here?
Jaret Seiberg:
Yeah, I like to think of myself as a realist on this front, right? There's no reason to have unbridled optimism. It's better to understand the real hurdles that are ahead for this. I do agree that Trump's election to a second term provides the best opportunity since the financial crisis to end the conservatorship. But whether that opportunity is a 10% opportunity or a 75% opportunity has yet to be determined. What I do know is it's not a 2025 priority. And so really this year is going to be about trying to set the groundwork for what could happen in 2026 or 2027. What I think has not gotten enough attention are the real hurdles on the policy front and the economic front to action. And I've been saying this for years, nobody is going to get a elected based on ending the conservatorship, but you definitely cannot get reelected because of you mess up the mortgage market by doing a recap and release in the wrong way.
And so what are those hurdles, right? You have the risk of what does it do to the cost of getting a mortgage and the availability of mortgages? You have the political risk of how does the government restructure an investment in which on paper it might be writing down 100 or 200 billion that it's potentially owed in order to generate the cash at a time when we have 35 trillion in debt, can the government really be seen as giving that, giving up all that value? And then the other issue is the practical, right? What would it mean for Fannie and Freddie to be out of conservatorship? Is the government still backing them implicitly? Does Congress need to create an explicit guarantee? What happens to the common security? What happens to all the blending of Fannie and Freddie MBS that we see today? All those questions have to be answered and those questions, all that work really has to happen soon because if it doesn't happen soon, we won't be ready. And so to me, that's the big challenge ahead.
Scott Smith:
Yeah, you've been harping on the idea that for either presidential candidate from months ago, a focus for 2025 and 26 beyond is going to be housing affordability. So you kind of got to that a little bit with Fannie and Freddie, but to the extent that it's going to be critical to mid-year elections that there's some success here in housing affordability, what do you think is going to happen there and how do you think it plays across the financials?
Jaret Seiberg:
Yeah, I think it was a really big deal that one of Trump's first executive orders identified the lack of housing supply and the high cost of housing as problems that his administration wants to address. And he set a requirement that he gets briefed every 30 days on what's being done to address it. Now, do I really believe that he's going to get briefed every 30 days on it? I mean, probably not, right? But that's not really the point. The point here is that it has been put high up on the agenda, and I think that really opens the door for actions that may have been seen as a bridge too far in a Republican administration. And that would include expansion of the low-income housing tax credit to build more entry-level rental housing and the establishment of a workforce housing tax credit to build more entry-level single family housing. I think both those could happen as part of the giant tax package that Congress has to get to this year. And both could be real positives for housing.
Scott Smith:
One of the components of housing affordability definitely has been insurance. I keep reading stories about how in certain areas insurance payments are larger than mortgage payments. Obviously insurance on a homeowner's level has been a state-regulated issue for a long, long time, but California wildfires are calling this back into significant focus. Is there any early commentary in DC about approaching affordability based on insurance costs as well?
Jaret Seiberg:
That's a great question, Scott, and really one that I think Washington hasn't started grappling with in depth. Now, there's been a couple of bills over the last several years to try to create natural disaster reinsurance programs or to sort of copy the National Flood Insurance Program and create a natural disaster insurance program so that if folks can't get insurance at the state level, you could buy a federal policy. The problem with all of this is we have been underpricing insurance in many markets for years, if not decades. And when you underprice insurance, you both encourage development in at-risk areas and you encourage greater home price appreciation in those areas.
And so when you try to right-size insurance payments to compensate for the risk, those payments go through the roof. And suddenly people who bought a house thinking that insurance was going to add 10% to their monthly payment, it's suddenly adding 50% to their monthly payment, and that creates payment shock. In addition, the political pressure is always going to be to keep payments low, right? Because you and I, we own houses we're voters, if your insurance goes through the roof, you're going to get angry and you're going to take that out on your local official. And it's why some of the biggest proponents of keeping flood insurance premiums low have been Republicans in states that are at risk for flood. And it's why I think this is really an intractable problem and one that's going to have to get really much worse before Washington gets ready to act.
Scott Smith:
You and I have not talked about this a little while, so forgive me if this is a little bit of a gotcha, but going back to the March madness of a couple of years ago in banks where we had the FDIC effectively stepping in and guaranteeing all deposits, where does that stand? And in a more progressive administration, is there a view that if we needed it all deposits would be protected again?
Jaret Seiberg:
I really was hoping we were going to start talking college basketball now that the college football season is over, so I did not appreciate that little tease there. But to circle back to the guts of your question. Yeah, I mean, a lot of what happened almost two years ago has been forgotten, right. The push to make deposit insurance reforms, those have largely evaporated. One of the early identified problems was that regional banks could have enormous unrealized losses on their available for sales securities because they didn't have to run those through capital, unlike the G-SIBs. And what it meant that when a bank started to sell those securities, it was actually having to realize those losses and further depleting its capital. So the idea was, well, let's fix that accounting for capital purposes. That has stalled, right? The idea of reforming liquidity rules requiring greater preparation for using the discount window, that hasn't gone anywhere. And so as I look at the landscape, policy really has not caught up to the challenges from 20 months ago.
Scott Smith:
Fair enough. And I'm going to pull another gear shift on you. Speaking from Davos today, Brian Moynihan said something to the effect of if there was more regulation or more authority or something along those lines around crypto, the banks would be willing to engage on crypto a little bit more. My Bloomberg social media feed kind of exploded with the crypto heads talking about that. What do you think is on tap for crypto in this administration?
Jaret Seiberg:
Yeah, so I think the crypto community is really close to getting crypto market structure legislation enacted into law, and that legislation would clarify the rules of the road in a way that SEC guidance and regulations and enforcement actions cannot do. I think that it is an imperative for that kind of legislation to move forward, and I think it would be extraordinarily beneficial. It'll deal with issues like how will custody work? What kind of disclosures need to be made with tokens? When does the SEC's authority end and the Commodity Futures Trading Commission's authority take over for tokens? How is staking going to be regulated? These are all really important questions and they need clarity. And the great news is that there's largely bipartisan agreement on what to do. My worry is that while we might be really close, we seem to be in reverse rather than in drive.
And I think the Trump token that was released just before the inauguration is going to lead to all sorts of democratic demands for investigations. Who bought it? How's it being used? What happened to the proceeds? And that can really derail the bipartisanship that this needs. The other big worry is that as this bill moves forward, what you really need to see is industry unity. And what often happens is industry gets behind a concept, but as soon as we get into the nitty-gritty, different companies have different views because it'll impact them in different ways. And if we start getting some of that in industry fighting, that's another way to derail this bill. So I am pretty optimistic, but I'm getting a little more nervous as we approach February.
Scott Smith:
And maybe to circle back a little bit closer to where we started, who do you think Donald Trump will listen to around financial services issues? Obviously Vance hits the more progressive button, and normally you would think a VP not super influential, but seems to have a better position than others. I mean, is it Vance, is it Bessent? Who do you think might be coming in that you'd like to see that he might listen to?
Jaret Seiberg:
Not to be a wise, but none of the above. He's going to listen to the stock market, right? The old Dow Jones Industrial Average. Which nobody in the market pays attention to, but everyone in Washington looks at, and that's the scorecard. And if those numbers are positive and going up, then policymakers are just going to have carte blanche to do what they want. If the market is falling, then Trump's going to start yelling. He's going to start changing people up, and there's going to be a different approach. So I think it's not so much that the people around him as much as it is the broader performance of the market, because at the end of the day, Trump does not care about financial policy, right. He cares about two issues, like we started with taxes and tariffs, everything else, personnel is policy, as long as the market's doing well.
Scott Smith:
So to me, that sounds a little bit like investors maybe are a little too enthusiastic about how good this administration is going to be for financials.
Jaret Seiberg:
Yeah, I mean, I think that the market latches onto a narrative, right? Biden was bad. Well, I mean, yeah, Biden was bad, but the market still was up a lot during Biden's tenure. And there's a view that Trump is going to be good and he may very well be good for markets, but we need to have reasonable expectations for what can happen and how quickly reforms that the industry is counting on, how quickly those can actually take effect. And the reality is everything's measured in years, not months, not weeks, and definitely not days.
Scott Smith:
Since you brought up the market as the sort of ultimate arbiter of how Trump thinks he's doing. What should we be watching for from the SEC and market structure rules that are now going to be potentially different?
Jaret Seiberg:
Yeah, so I think when it comes to the SEC, the key is going to be the confirmation hearing for Paul Atkins, who Donald Trump has nominated to be the chair. He did vote against Reg NMS several decades ago when he was a commissioner, and this was first before the agency. I have a hard time believing he's really going to prioritize making changes to national market structure rule this time around. There's much bigger issues on the commission's agenda, and I think those other issues are really going to be a greater priority.
Scott Smith:
And I know we started this by talking about your sort of year ahead piece and the 150 some odd items to be watching, and we're only two and a half days in, at least in terms of markets being open. But anything that was not in your piece that has happened so far that surprised you?
Jaret Seiberg:
It's not so much things that are happening, it's really where questions are coming from. And I do think I may have underestimated the revival of the 2017 interest in the government eliminating or curbing student loan programs. That seems to be a really big issue for a lot of investors. It is almost a carbon copy of the questions I got eight years ago when Trump was entering his first term. The reality is that it's very difficult to reform the student loan program because the programs that you would most want to get rid of or are privatized, are the ones which score is making the most money for the government. And so when you're looking for budget savings, you could actually end up with budget losses. And that's why I think the student loan program overall doesn't change that much from administration to administration. Sure, around the edges, right? Biden tried to go radical with debt forgiveness, but that didn't get rid of or replace the PLUS program, the Stafford program remains, and I would expect these programs are going to have a long shelf life.
Scott Smith:
Got it. I think we're probably coming up towards the end of our time. Is there anything that you are laser focused on that we haven't gotten to yet?
Jaret Seiberg:
I am ready for spring training to start and the start of baseball season, right? I think we can all have unbridled optimism when pitchers and catchers report, and to me, that's going to be the highlight for the next couple of weeks. In the meantime, Washington is just going to continue its slow march forward. The next two or three months are going to be mostly about confirming people and then trying to work on budget reconciliation to begin the extension of the Trump tax cuts. So in terms of substantive work at the regulatory agencies, as I said, I think it's going to take some time. So get ready for baseball and we'll keep you abreast of everything else out of Washington.
Scott Smith:
As usual, Jaret Seiberg way ahead of the curve talking about baseball. I'm more focused on the Commander's game this weekend.
Jaret Seiberg:
Go Commies.
Scott Smith:
Thank you everybody for listening to the Inaugural TD Financial Services Podcast. We really appreciate your time and we look forward to serving you with many more podcasts to come.
Speaker 1:
Thanks for joining us. Stay tuned for the next episode of TD Cowen Insights.
This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by TD Securities, may not be current, and TD Securities has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. The views and opinions expressed in this podcast are not necessarily those of TD Securities and may differ from the views and opinions of other departments or divisions of TD Securities and its affiliates. TD Securities is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities or any other product and should not be relied upon to evaluate any potential transaction. Neither TD Securities nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.

Managing Director, Washington Research Group - Financial Services Policy Analyst, TD Cowen
Jaret Seiberg
Managing Director, Washington Research Group - Financial Services Policy Analyst, TD Cowen
Jaret Seiberg
Managing Director, Washington Research Group - Financial Services Policy Analyst, TD Cowen
Jaret Seiberg is the financial services and housing policy analyst for TD Cowen Washington Research Group, which was recently named #1 in the Institutional Investor Washington Strategy category. The team has been consistently ranked among the top macro policy teams for the past decade. Before joining TD Cowen in August 2016, he served in similar roles at Guggenheim Securities, MF Global, Concept Capital and Stanford Financial Group. He began following financial policy in the early 1990s as a journalist covering efforts in Congress to complete the last of the laws from the savings and loan crisis. He tracked the merger wave of the 1990s and Glass-Steagall repeal in 1999 as the deputy Washington bureau chief for American Banker and as the Washington bureau chief for The Daily Deal. His bailiwick at TD Cowen includes issues related to commercial banks, housing, payments, investment banking, M&A, taxes, the CFPB, crypto currency, cannabis and Capitol Hill.
Mr. Seiberg has a BA from The American University and an MBA from the University of Maryland at College Park. He speaks regularly at industry events, is often quoted in the media, and appears on CNBC and Bloomberg TV.
Material prepared by the TD Cowen Washington Research Group is intended as commentary on political, economic, or market conditions and is not intended as a research report as defined by applicable regulation.

Scott Smith
Managing Director and Head of Financial Services Specialty Sales, TD Securities
Scott Smith
Managing Director and Head of Financial Services Specialty Sales, TD Securities
Scott Smith is a Managing Director and Head of Financial Services Specialty Sales at TD Securities in New York. He has over 30 years of institutional sales experience, having led FIG Specialty Sales at Credit Suisse and BofA for 17 years. Scott has also worked in financials specialty sales at JPM and at Lehman Brothers. He began his career in equity research at Lehman Brothers covering the business services sector with a focus on payments companies. Scott graduated from Columbia University with a BA in Psychology.