Trump takes aim at Dodd-Frank
President Trump moved last week to unravel Wall Street restrictions and other financial regulations passed by Democrats in the wake of the 2008 financial crisis, signing an executive order that calls for a review of the sweeping Dodd-Frank Act. The 2010 law reined in risky mortgage practices and derivatives trading, and created the Consumer Financial Protection Bureau. Trump’s order can’t overturn the law, which was passed by Congress and can only be repealed by lawmakers. But it instructs the Treasury to meet with regulators to discuss possible changes. Trump said his planned overhaul would make it easier for Wall Street to approve loans to companies, allowing businesses to hire more workers. “I have so many people, friends of mine that had nice businesses, they can’t borrow money,” said the president.
Trump signed a memorandum ordering the Labor Department to review the Fiduciary Rule, which takes effect in April. That regulation requires brokers to act in a client’s best interest when giving retirement advice, rather than push investments that yield higher profits for financial advisers. An early draft of the memo deferred the rule’s start date by 180 days; that delay didn’t appear in the final version. Sen. Bernie Sanders (I-Vt.) said Trump had betrayed his campaign promise to stand up to Wall Street. “I don’t mean to be disrespectful,” said Sanders, “but this guy’s a fraud.”
What the columnists said
So, who’s ready for another financial crisis? asked Richard Eskow in HuffingtonPost.com. Despite all his tough talk on Wall Street elites and protecting the little guy, Trump has declared war on some of the most “fundamental financial protections” guarding ordinary Americans. Without those safeguards in place, we can expect a repeat of the big bank excesses that cost so many people their homes, savings, and retirement security in the last economic meltdown. The president announced this regulatory rollback while flanked by Wall Street CEOs, letting “the American people know whose side he’s on, and it’s not theirs.”
Dodd-Frank has made things worse for Americans, not better, said Bob Ehrlich and J.C. Boggs in Forbes.com. The mammoth act produced approximately 24,000 pages of convoluted and costly new regulations. Small businesses complain that these labyrinthine requirements make it difficult to secure good loans and to build their companies. No wonder we’re experiencing “one of the lowest growth periods in our nation’s history.”
Trump’s order can only do so much, said Ian Katz in TheHill.com. If Republicans really want to unravel Dodd-Frank, they’ll have to squeeze things through using budget reconciliation, or somehow persuade Democrats to help them pass repeal legislation. Actually, Trump could easily let Dodd-Frank die a slow death through “neglect,” said David Dayen in TheNation.com. The president has just sent a huge “signal” to regulators: to stop enforcing rules and avert their eyes as the banks return to making risky bets and committing “all the other sins that led to the financial crisis.” Trump’s order is “just a message, but it’s a scary one.”