Trump govt calls for major revamp of Wall Street rules
The Trump administration laid out its highly anticipated plan for overhauling bank rules, calling on the government to ease, though not eliminate, many of the strictures that were imposed on Wall Street after the financial crisis.
The changes, outlined in a report released on Monday evening by the Treasury Department, urge federal agencies to re-write scores of regulations that bankers have frequently complained about in the seven years since the passage of the Dodd-Frank Act. They include adjusting the annual stress tests that assess whether lenders can endure economic downturns, loosening some trading rules and paring back the powers of the watchdog that polices consumer finance.
The Treasury said its plan was designed to spur lending and job growth by making regulation “more efficient” and less burdensome. Unlike the bill passed last week by House Republicans, the report consistently calls for most Obama-era rules to be dialed back, not scrapped.
“Properly structuring regulation of the US financial system is critical to achieve the administration’s goal of sustained economic growth and to create opportunities for all Americans,” Treasury Secretary Steven Mnuchin said in a statement.
The Treasury review, which President Donald Trump requested in an executive order in February, opens a new front in the administration’s deregulatory push. While Mnuchin said the administration backs congressional efforts to roll back DoddFrank, the study focuses heavily on changes that can be made without legislation.
The House Bill passed June 8 isn’t expected to go through the Senate without major revisions because of the need for Democratic support.
Democrats, who say Dodd-Frank is vital for keeping Wall Street in check after its risky trading helped bring the US economy to near collapse in 2008, were quick to criticise the Treasury report as a big bankinspired wish list.
“Too many hardworking Americans still haven’t fully recovered from the financial crisis, and Washington should be focused on protecting them by holding Wall Street accountable, not doing its bidding,” Senator Sherrod Brown, the top Democrat on the Senate Banking Committee, said in a statement.
Representatives of the banking industry generally applauded the report and said they hoped it would spur action.
“We urge regulators and Congress to take up these recommendations expeditiously, and to consider additional changes so banks can continue to play their important role in accelerating economic growth,” Rob Nichols, president of the American Bankers Association, said in a statement.