In addition to firing warning tweets to Iran saying ”Iran is playing with fire – they don’t appreciate how ‘kind’ President Obama was to them. Not me!”, President Donald Trump has been busy signing executive actions and orders on a near daily basis. On Friday, February 3, President Trump signed an executive order that commands his administration to review the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act with the objective of revising and potentially eliminating components of this act which was set in place in response to the 2008 financial crisis.
While some say Trump’s steps to scale back Dodd-Frank are largely symbolic in that only Congress can undo the legislation, the symbolism is not without significance as it will have an impact on consumer and business confidence. The act is under review or, as they say in the vernacular, “on the chopping block” for a number of reasons. Dodd-Frank, which was named for its authors former Democratic Senator Chris Dodd (CT) and former Democratic Congressman Barney Frank (MA), is perceived as being too burdensome for smaller banks. Furthermore, many who follow the financial industry also have described the regulation as being a manifestation of government overreach and potentially unconstitutional.
So what exactly does President Trump’s authorized review of Dodd-Frank mean? Well, first of all, the Consumer Financial Protection Bureau (CFPB), the entity which owes its naissance to Massachusetts Senator Elizabeth Warren (D) may be eliminated or reworked. The CFPB has come under fire for imposing excessive regulations that do not add much to consumer financial protection. Trump’s economic adviser and Goldman Sachs alum Gary Cohn has stated in interviews that the Trump Administration may seek to replace the CFPB’s current director Richard Cordray.
President Trump also signed another action which would direct the Department of Labor to halt their implementation of the “Fiduciary Rule”, which would automatically designate all financial planners who work with retirement plans or provide retirement planning advice to the level of a fiduciary, or someone who is ethically bound to always act in the best interest of their clients. The Trump Administration has criticized the “Fiduciary Rule” of implementing consumer protection which was not warranted and also of being too financially onerous for asset management firms. The Fiduciary Rule was originally slated for a rollout starting April 2017.
Once again, we see President Trump using his pen and his phone to undo unnecessary, burdensome legislation implemented under his predecessor, former President Barack Obama’s watch.
Image: Public Domain; https://fr.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act