Bankers have to guess whether Trump will be a pro-Wall Street president or not

Donald Trump has reached the phase of his campaign where he tries to solicit huge checks from Wall Street barons.

Coincidentally, Trump says he will soon release a bank-regulation plan that will come "close to dismantling Dodd-Frank," the 2010 law that imposed new regulations and restrictions on banks. Dodd-Frank is, naturally, much disliked on Wall Street.

"Dodd-Frank has made it impossible for bankers to function," he told Reuters on Tuesday. "It makes it very hard for bankers to loan money for people to create jobs, for people with businesses to create jobs. And that has to stop."

Bankers should be wary before they decide to invest in Trump as a pro-bank candidate. As some of them know from lending money to him in the past, Donald Trump's ideas about keeping promises to bankers are situationally dependent.

Just two weeks ago, Trump was talking about how he's borrowed money in the past knowing he'd be able to get banks to cut him a break if he had trouble repaying in full. As with those promises to repay loans, bankers should expect Trump's promise to be nice to them as president to depend on the circumstances.

Trump's specific offer about Dodd-Frank is actually pretty credible. If Trump is somehow elected (note: very unlikely) he will almost surely have a Republican majority in Congress. Republicans have long said they want to repeal Dodd-Frank, and they'd probably send him a repeal bill. It would be awkward for him to do anything other than sign it.

Presidential discretion

But the broader implication - that he'd take the reins off banks - is a wild card. Dodd-Frank or no Dodd-Frank, decisions about bank regulation will be subject to great discretion by the president and his appointees at the Treasury Department, the Federal Reserve, and other regulators.

How might a President Trump use and abuse that discretion? Well, consider how he's talked about other sectors of the economy.

Trump has threatened to use a much heavier hand in punishing companies that aren't acting in line with his policy priorities. He has attacked individual companies, like Ford and Carrier, for relocating factories overseas, saying he'd slap a 40% tariff on Ford for making cars in Mexico.

When the Washington Post covered him in ways he disliked, he responded by threatening Amazon, whose founder Jeff Bezos owns the Post, over tax and anti-trust issues. (Bezos is also an investor in Business Insider through his personal investment company Bezos Expeditions.)

Does anyone doubt that Trump would use the powers of the presidency to stick it to Wall Street banks if that became politically expedient - whether or not they deserved it?

Bank shareholders clearly believe Dodd-Frank has eaten into profits, and they don't like it. They probably don't feel good about the rules they'd have to operate under with President Hillary Clinton.

But as with Ford and Carrier and Amazon, a Trump presidency would likely mean doing business under an undefined and ever-changing set of rules that is subject to the president's whims. Who knows whether that would be more or less costly to bankers than the existing rules they don't like?

Bankers are supposed to be averse to risk. They should be pricing that risk into a model of a Trump presidency, as they decide whether to invest in it.