Trump moves to limit fi­nan­cial ser­vices rules

The Hamilton Spectator - - BUSINESS - JILL COLVIN

WASH­ING­TON — U.S. Pres­i­dent Don­ald Trump is tak­ing his first steps aimed at scal­ing back fi­nan­cial ser­vices reg­u­la­tions, and the Repub­li­can-run Con­gress cast a vote early Fri­day sig­nalling that it’s ea­ger to help.

The pres­i­dent signed an ex­ec­u­tive or­der that will di­rect the Trea­sury sec­re­tary to re­view a 2010 fi­nan­cial over­sight law, which re­shaped fi­nan­cial reg­u­la­tion in the U.S. af­ter the 2008-09 fi­nan­cial cri­sis.

While the fi­nan­cial over­sight or­der won’t have any im­me­di­ate im­pact, the ad­min­is­tra­tion’s in­tent is clear.

“The Dodd-Frank Act is a dis­as­trous pol­icy that’s hin­der­ing our mar­kets, re­duc­ing the avail­abil­ity of credit and crip­pling our econ­omy’s abil­ity to grow and cre­ate jobs,” said Trump press sec­re­tary Sean Spicer.

Ear­lier Fri­day, the Sen­ate used an un­usual predawn vote to ap­prove leg­is­la­tion, 52-47, killing a reg­u­la­tion that has re­quired oil and gas com­pa­nies to dis­close pay­ments to the Amer­i­can or for­eign gov­ern­ments for com­mer­cial devel­op­ment. The House ap­proved the mea­sure this week, and Trump is ex­pected to sign it.

Trump pledged dur­ing his cam­paign to re­peal and re­place the Dodd-Frank law, which also cre­ated the Con­sumer Fi­nan­cial Pro­tec­tion Bureau (CFPB).

“Dodd-Frank is a dis­as­ter,” Trump said ear­lier this week dur­ing a meet­ing with small busi­ness own­ers. “We’re go­ing to be do­ing a big num­ber on Dodd-Frank.”

The pres­i­dent was to dis­cuss the topic with top CEOs and bank­ing ex­ec­u­tives at a meet­ing Fri­day morning at the White House, where at­ten­dees in­cluded Jamie Di­mon, the CEO of JPMor­gan Chase.

He told the group that he expects his ad­min­is­tra­tion “to be cut­ting a lot out of Dodd-Frank be­cause frankly I have so many peo­ple, friends of mine that have nice busi­nesses that can’t bor­row money. They just can’t get any money be­cause the banks just won’t let ’em bor­row be­cause of the rules and reg­u­la­tions of Dodd-Frank.”

Trump’s or­der won’t have any im­me­di­ate im­pact. But it di­rects the Trea­sury sec­re­tary to con­sult with mem­bers of dif­fer­ent reg­u­la­tory agen­cies and the Fi­nan­cial Sta­bil­ity Over­sight Coun­cil and re­port back on po­ten­tial changes.

That likely in­cludes a re­view of the CFPB that vastly ex­panded reg­u­la­tors’ abil­ity to po­lice con­sumer prod­ucts, from mort­gages to credit cards to stu­dent loans.

Trump ad­min­is­tra­tion of­fi­cials, like other crit­ics, ar­gue Dodd-Frank did not achieve what it set out to do and por­tray it as an ex­am­ple of mas­sive gov­ern­ment over­reach.

“Banks are forced to hoard money be­cause they’re forced to hoard cap­i­tal and they can’t take any risk. We need to get banks back in the lend­ing busi­ness,” said White House Na­tional Eco­nomic Coun­cil di­rec­tor Gary Cohn. “That’s our num­ber one ob­jec­tive.”

Trump also signed a pres­i­den­tial mem­o­ran­dum Fri­day that in­structs the Labour De­part­ment to de­lay im­ple­ment­ing the “fidu­ciary rule,” which was aimed at block­ing fi­nan­cial ad­vis­ers from steer­ing clients to­ward in­vest­ments with higher com­mis­sions and fees that can eat away at re­tire­ment sav­ings. The rule, which was set to take ef­fect in April, will be de­layed for 90 days while it’s re­viewed. Crit­ics ar­gue the rule lim­its re­tirees’ in­vest­ment choices by forc­ing asset man­agers to steer them to the low­est-risk op­tions.

PABLO MARTINEZ MONSIVAIS, THE AS­SO­CI­ATED PRESS

Don­ald Trump signs or­der to re­view the Dodd-Frank fi­nan­cial over­sight law.

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