Trump talks housing, affordability at State of the Union

• Key insight: President Donald Trump urged Congress to pass legislation restricting institutional investors purchasing single family homes, following up on his executive order that the legislature would need to codify. 
• What’s at stake: Banks generally favor rhetoric that promotes housing availability and funding, since it helps produce more mortgages, but the institutional investor rhetoric is fundamentally anti-big corporation, which could make larger players nervous. 
• Forward look: While many of these ideas, including the ones that Trump didn’t tout in his speech, are unusual for a Republican president, they would need other powerful Republican leaders in Congress to also advocate for them, which so far hasn’t happened. 

WASHINGTON — President Donald Trump focused on affordability, including in housing, in his State of the Union speech to Congress on Tuesday evening. 

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In his lengthy remarks, Trump spoke on everything from the U.S. men’s hockey team to gas prices. Banks and the financial industry escaped the limelight despite periodic presidential ire toward the industry in the form of debanking criticism and credit card rate caps and swipe fees. 

Housing and interest rates took up a slice of the speech, with Trump promising to both make homes more affordable and preserve wealth accumulation for current homeowners. Trump said that lower interest rates would achieve this. 

“Low interest rates will solve the Biden-created housing problem while at the same time protecting the values of those people who already own a house that really feel rich for the first time in their lives,” he said. “We want to protect those values. We want to keep those values up. We’re going to do both, and we are going to keep it that way.” 

However, Trump described an environment that would not lead the Federal Reserve to cut interest rates. 

“Inflation is plummeting, incomes are rising fast. The roaring economy is roaring like never before,” Trump said. 

Trump has repeatedly put public pressure on Fed Chairman Jerome Powell to lower interest rates. Powell said last month that the central bank has been served grand jury subpoenas from the Justice Department, and said the subpoenas and potential indictment over his testimony last June concerning ongoing renovations at Federal Reserve headquarters

should be considered part of the administration’s ongoing campaign to force the central bank to lower interest rates.

Trump also called on Congress to pass a law that would put into place his executive order banning large, institutional investors from purchasing single family homes. Any such action would require an act of Congress. 

“Last month, I signed an executive order to ban large Wall Street investment firms from buying up, in the thousands, single-family homes,” Trump said. “And now I’m asking Congress to make that ban permanent, because homes for people, really that’s what we want. We want homes for people, not for corporations. Corporations are doing just fine.” 

The call-out got rare scattered applause across the Democratic side of the aisle. Lawmakers like Sen. Elizabeth Warren, D-Mass., have tried to get momentum on this issue in the past, while most Republican lawmakers have not signed on to the idea. Trump’s repeated calling for the policy might start to change that calculus among congressional Republicans. 

Trump’s speech comes on the heels of a year of both deregulation and tumultuous policymaking from Washington. 

While banks have gotten many items on their wish lists like the attempted dismantling of the Consumer Financial Protection Bureau and general slowdown in enforcement, they’ve also gotten volatility in markets due to tariffs and the occasional barb from the president — an uncomfortable feeling for an industry that’s become used to being out of the limelight for a couple of presidential election cycles. 

On tariffs, Trump did not signal a departure from his aggressive stance after his rare Supreme Court loss last week. 

“Just four days ago, an unfortunate ruling from the United States Supreme Court just came down, a very unfortunate ruling,” Trump said. “But the good news is that almost all countries and corporations want to keep the deal that they already made.” 

“Knowing that the legal power that I as president have to make a new deal could be far worse for them, and therefore they will continue to work along the same successful path that we had negotiated before the Supreme Court’s unfortunate involvement,” he said. 

Many high-profile issues for banks, like credit cards, didn’t earn a mention in the speech. 

And another issue went unmentioned: Earlier in the day,  The Wall Street Journal reported that the administration is considering an executive order requiring banks to collect information from all customers, both new and existing, to verify citizenship. The move would be a massive and likely pricey data haul for banks that have historically resisted additional data fields on items such as loan applications by arguing that the regulatory burden is too high. 

The compliance lift for a requirement to collect citizenship information on all account holders would likely be much higher. There is no law or rule that bank account holders in the United States be U.S. citizens, and many people don’t have passports, or easy access to their birth certificates.