President Donald Trump told a group of chief executives that his administration was revamping the Wall Street reform law known as Dodd-Frank and might eliminate the rules and replace them with “something else”.
At the beginning of his administration, Trump ordered reviews of the major banking rules put in place after the 2008 financial crisis, and last week he said officials were planning a “major haircut” for them.
“For the bankers in the room, they’ll be very happy because we’re really doing a major streamlining and, perhaps, elimination, and replacing it with something else,” Trump said.
“That will be the minimum. But we’re doing a major elimination of the horrendous Dodd-Frank regulations, keeping some obviously, but getting rid of many,” he said.
We’re really doing a major streamlining
The White House is not unilaterally able to upend Dodd-Frank’s rules, almost all of which are implemented by independent regulatory agencies like the Securities and Exchange Commission and the Federal Reserve.
A sweeping change to the law would require congressional action, though in some cases regulators may also have wiggle room to make changes through a formal rule-making process.
In February, Trump issued an executive order requiring Treasury Secretary Steve Mnuchin to consult with US regulators and submit a report outlining a proposal for possible regulatory and legislative changes that would help fuel economic growth and promote American business interests.
That report, due to be released in June, will likely serve as a blueprint for possible changes down the road.
Congressional action on a Wall Street Bill is not expected in the near term, as Congress focuses primarily on healthcare and tax reform.
On Tuesday, House of Representatives Financial Services Committee chairman Jeb Hensarling announced that he was planning to introduce a new draft by month’s end of sweeping legislation known as the “Financial Choice Act” that would give Dodd-Frank a major overhaul.
The new draft of the Bill would largely defang the Consumer Financial Protection Bureau’s supervisory powers and make the director removable at will.