President Donald Trump is expected to sign executive orders Friday that begin the process of peeling back the Dodd-Frank Wall Street Reform and Consumer Protection Act.
By beginning to dismantle Dodd-Frank, a regulatory measure passed in the wake of the financial crisis of 2007, Trump is making good on his campaign promise for deregulation. In fact, repealing Dodd-Frank would mark the second instance of Trump making good on deregulation promises. The first occurred Monday, when the president signed an executive order aimed at dramatically cutting regulations on American small businesses. (RELATED: Trump Signs Order Slashing Small Business Regulations)
Speaking about Friday’s executive order, White House National Economic Council Director Gary Cohn told reporters Thursday: “Americans are going to have better choices and Americans are going to have better products because we’re not going to burden the banks with literally hundreds of billions of dollars of regulatory costs every year.”
There appears to be a pervading sentiment in the Trump White House that policies instituted after the financial crisis to mitigate bad behavior by banks and protect American consumers have largely failed to accomplish that objective. Instead, banks have been saddled by crippling regulations and American consumers have been largely left with fewer investment vehicles and at greater cost to boot.
Trump said earlier this week in a meeting with business owners that Dodd-Frank was a “disaster.” Cohn also said that the current regulations put in place by Dodd-Frank simply hinder banks from doing business, ultimately hurting consumers. Furthermore, Cohn thinks that many of rules imposed on the financial industry after the financial crisis have not been successful.
While Friday’s action establishing the framework for further repeals down the road, future regulatory rollbacks could include personnel changes at agencies or more executive orders.
Another portion of Friday’s order will take aim at halting the Department of Labor’s retirement advice rule, also known as the “fiduciary rule,” issued by the Obama Administration in 2016. The ruling effectively requires brokers to act in their clients’ best interests when they are advising them on retirement or 401k plans. By the Labor Department’s own estimates, the ruling is “the most expensive regulation promulgated by the Obama administration last year,” senior fellow for the Competitive Enterprise Institute, John Berlau, tells The Daily Caller News Foundation. Indeed, compliance costs for this rule are expected to be as high as $31 billion over the next decade, according to the Labor Department.
Opponents of the Labor Department rule not only argue that the compliance costs are extraordinarily burdensome, but that any new or further regulations should be instituted by an agency that has more expertise, like the Securities and Exchange Commission.
The executive order Friday will surely be met with opposition from Democrats and lobbying groups who believe the post-2008 regulatory reforms are protecting consumers from predatory investment brokers, a narrative challenged by Trump’s performance with voters in the Midwest, where homeowners were hit hardest by the housing crisis.
Trump will also reportedly sign another executive order in the near future to review significant portions of a controversial scheduled ruling to take effect in April, the Wall Street Journal reports.
Send tips to robert@
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact email@example.com.