What will Trump’s Dodd-Frank rollback look like?

by Ryan Smith06 Feb 2017

President Donald Trump moved Friday to roll back the controversial Dodd-Frank Act. But how will the rollback work?

Trump announced several steps Friday to undo rules enacted under Dodd-Frank. After a meeting with business executives, he signed a directive calling for the rewriting of major provisions in the act, according to a New York Times report. Another directive he signed is expected to roll back a Labor Department rule that required financial advisors to act in their clients’ best interests. Trump said the directives were intended to ease the regulatory burdens on banks and enable them to lend money more freely.

“We expect to be cutting a lot out of Dodd-Frank because frankly, I have so many people, friends of mine that had nice businesses, they can’t borrow money,” Trump said during his meeting with business leaders. “They just can’t get any money because the banks just won’t let them borrow it because of the rules and regulations in Dodd-Frank.”

Democrats and consumer groups were quick to blast the orders as love letters to Wall Street.

:The administration apparently plans to turn over financial regulation to Wall Street titan Goldman Sachs, and make it easier for them and other big banks like Wells Fargo to steal from their customers and destabilize the economy,” Lisa Donner, executive director for Americans for Financial Reform, said in a statement. “That betrays the promises Trump made to stand up to Wall Street, and it will have dire consequences if he’s successful.”

Trump doesn’t actually have the authority to roll back Dodd-Frank by executive order, the Times reported. However, his executive orders can set the tone for how zealously federal agencies enforce existing rules.

And the White House said Friday that it would work with Congress on legislation to further address the rollback of Dodd-Frank regulations, according to a Reuters report.


 

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COMMENTS

  • by Oh-those-pesky-facts | 2/6/2017 12:01:00 PM

    As usual with Trump, a little reality check: https://www.bloomberg.com/news/articles/2017-02-04/trump-cites-friends-to-say-banks-aren-t-making-mortgages-they-are

  • by | 2/6/2017 2:03:20 PM

    If it creates a market in which insurance companies and larger funds can get creative at market interest rates, then bully! If it just paves the way for the big box banks to invest in the stock market, then no go. So much damage has been done and so many lenders put as their top priority "compliance" rather than commonsense, it is hard to imagine how that can be rolled-back.

  • by Joe Mortgage | 2/6/2017 3:21:16 PM

    With working in the industry....everybody acts and sounds like he is repealing it. That absolutely would be disaster. However, there is just talk of revising Dodd-Frank. Do you know how many ridiculous things there are that prevents consumers from getting mortgages? Gifts for down payment are and always have been allowed. The problem is now you have to prove "blood" family. That involves birth certificates, marriage licenses and in many cases multiple items. I had a client whose grand mother was giving her a gift, but because of a step father-in-law's mother where the names couldn't get matched up.....she didn't get a house. How about having to prove what are sometimes ridiculously low deposits in your bank account because they aren't payroll......as if that is money laundering. The problem is, the sinners of 10 years ago are penalizing the consumer of today. There are a lot of basic measures that I don't think will be removed (like having to prove income for example), where there can still be plenty of scrutiny of mortgages to make them safe. It is the ridding of the ridiculous rules that were caused by the small percentages as a whole, of people from the mid 2000's.

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