Bankers give Election 2020 edge to Trump
WASHINGTON — Bankers are optimistic about President Trump’s chances of getting reelected, bucking a majority of national polls suggesting that former Vice President Joe Biden is leading, according to recent survey results.
Bankers also mostly believe that a Trump victory and Republican sweep in Congress would be the best outcome for their industry and for the country, according to a survey by Arizent, the publisher of American Banker and other financial services publications such as PaymentsSource, Financial Planning, Credit Union Journal and National Mortgage News.
Out of nearly 200 bankers who responded to the survey, 56% said that they believed President Trump’s reelection would be the most likely outcome of the election — the same percentage of all business professionals who participated in the survey.
As for what bankers believe would be best for the industry, 64% said Trump’s reelection would be the best outcome, as compared to 58% of all survey respondents. Sixty-one percent of bankers who responded to the survey said Trump’s reelection would be the best outcome for the country, compared with 56% percent of total survey participants.
“Banks have gotten a significant reduction in the corporate tax rate and they’ve seen the regulatory environment improve under President Trump, so it’s not surprising that the status quo is preferable to the unknown,” said Jaret Seiberg, an analyst at Cowen Washington Research Group.
A total of 1,201 business leaders and professionals in the U.S. answered the survey, conducted online between Sept. 17 and Sept. 22. The industries represented include banks, payment firms, insurance agents and carriers, municipal finance agencies and advisors, accounting firms, tax preparers, fintech and IT professionals, wealth management and financial advisory firms.
Yet the survey results deviate from national political surveys leading up to the November elections. The RealClearPolitics average of various polls has Biden leading Trump by more than 6 points nationally, and has the former vice president ahead in nine out of 12 battleground states. FiveThirtyEight's average of national polls shows Biden leading by more than 7 points.
A financial services lobbyist who spoke on the condition of anonymity said bankers’ perspective may be a result of their communication with their customer base.
“You are talking about people that have a bank account, people that are willing to bank in person as opposed to mobile,” the lobbyist said. “Or maybe it’s their small-business customers."
Brian Gardner, an analyst at KBW, said bankers' views on the election are likely a good indicator about the views of the business community at large.
“Bankers are in a unique positon so they are talking to customers all day long. … Bankers are talking to their customers on a daily basis,” said Brian Gardner, an analyst at KBW. “They have a pretty good pulse of their communities and their business markets. So they do have a unique insight as to what’s going on around them."
Despite the economic uncertainties resulting from the COVID-19 pandemic during Trump's presidency, the past three and a half years have brought numerous policy victories for the banking industry, particularly when the GOP controlled both chambers before the House flipped to the Democrats at the start of 2019. Not only did banks support the tax overhaul, but Trump gets credit for the regulatory relief bill signed into law in 2018.
“The financial sector, banks in particular, smaller banks especially, have benefitted from the Trump administration’s regulatory agenda," said Gardner. "Where the industry probably got one of the bigger benefits were the cuts in corporate tax rates. … If Biden were to raise the tax rate, I think some banks would feel the pain of that.”
Meanwhile, the vast majority of respondents expect the status quo to continue in Congress. Eighty-one percent of bankers in the survey said they believe Republicans will continue to control the Senate, compared with 73% of business leaders overall, and 87% of bankers said Democrats would likely continue to control the House.
In a sign of heightened polarization, the survey respondents tended to support one party controlling both the executive and legislative branches.
Fifty-eight percent of bankers responding to the survey said a GOP sweep of Congress and the White House was best for the industry, and 51% said that outcome was best for the country. About a quarter of respondents said a Democratic sweep was best for the industry and 33% said it was best for the country.
In contrast, only a small fraction of respondents supported divided government: 11% said a Biden win and a divided Congress was best for the industry and 6% said it was best for the country. Of those supporting a Trump win and divided Congress, 5% said it was best for the industry, and 10% said it was best for the country.
“Every corner of our society has been politicized and you don’t need this poll to tell you that,” Isaac Boltansky, director of Washington Research at Compass Point Research & Trading.
Even though most polls give Biden an edge, results of the Arizent survey of banking professionals are closer to national trends as to what respondents predict will be the outcome.
“Biden’s polling lead is what it is, but usually Trump does better in the ‘Who do you think will win?’ question,” said Kyle Kondik, managing editor at University of Virginia Center for Politics’ Sabato’s Crystal Ball. “That’s actually the reverse of what we saw in 2016. I’m wondering if ... the shock of Trump’s win is lingering into the 2020 election. … I think there’s skepticism about [Biden’s] chances.”