Trump Orders Review of Dodd-Frank; Wants to Roll Back Regulation of Financial Institutions

On Friday, President Trump signed an executive order to follow through on promises to roll back financial regulations. The Order, titled “Executive Order on Core Principles for Regulating the United States Financial System,” directs a wide review of financial regulations.

The full Order can be found here.

The Order initially outlines the Core Principles of the Trump administration:

Policy. It shall be the policy of my Administration to regulate the United States financial system in a manner consistent with the following principles of regulation, which shall be known as the Core Principles:

1. empower Americans to make independent financial decisions and informed choices in the marketplace, save for retirement, and build individual wealth;
2. prevent taxpayer-funded bailouts;
3. foster economic growth and vibrant financial markets through more rigorous regulatory impact analysis that addresses systemic risk and market failures, such as moral hazard and information asymmetry;
4. enable American companies to be competitive with foreign firms in domestic and foreign markets;
5. advance American interests in international financial regulatory negotiations and meetings;
6. restore public accountability within Federal financial regulatory agencies and rationalize the Federal financial regulatory framework.

The Order then directs the Secretary of Treasury as follows:

The Secretary of the Treasury shall consult with the heads of the member agencies of the Financial Stability Oversight Council and shall report to the President within 120 days of the date of this order (and periodically thereafter) on the extent to which existing laws, treaties, regulations, guidance, reporting and recordkeeping requirements, and other Government policies promote the Core Principles and what actions have been taken, and are currently being taken, to promote and support the Core Principles. That report, and all subsequent reports, shall identify any laws, treaties, regulations, guidance, reporting and recordkeeping requirements, and other Government policies that inhibit Federal regulation of the United States financial system in a manner consistent with the Core Principles.

insideARM Perspective

As noted above, this Order is seen as one of the first steps in Trump’s plan to reduce regulations of financial institutions. It is way too early to speculate on the future impact of those plans. The Order never specifically mentions the Dodd-Frank Act. But, the directive is very expansive.

Meanwhile, insideARM also reported today about a bill introduced by three Republican Senators to amend the Consumer Financial Protection Act of 2010. 

insideARM will continue to monitor this story and report on potential impact to the ARM industry