Trump Takes Further Step Towards Scaling Back Dodd-Frank Act

Josh O'Neill

25 April 2017

President Donald Trump has signed three executive actions ordering a review of tax and financial regulatory policies, which include shelving two powers the executive branch holds under the Dodd-Frank Act, the Wall Street Journal reports.

The Wall Street oversight powers, which allow the government to take over a failing financial firm and enable it to impose more stringent regulation on risky firms, will be shelved during a paid or 180-day reviews, officials have reportedly said.

Trump reportedly signed two memos last Friday asking the Treasury Department to review the powers and not to invoke them in the meantime.

The Congressional Budget Office estimates that revoking the provision could save around $15 billion over the next 10 years.

The President's latest move echoed his vows earlier this month to shave down elements of the 2010 Dodd-Frank Act, which was enacted in response to the 2008 financial tsunami to act as a safety net in the event of economic meltdown.

But aggressive steps to lessen regulatory burden are likely to face backlash from opposition Democrats, who claim that Trump is determined to unwind changes designed to protect the average investor through to the global banking system.

Some industry figureheads, such as Jamie Dimon, JP Morgan's chief executive, have shown support for deregulation.

The Wall Street giant's CEO pushed for regulatory change to in his his annual letter to shareholders, in which he said the current “unnecessarily complex, costly and sometimes confusing” environment has stymied economic growth.

Jamie Dimon devoted about a third of his annual letter to his arguments for regulatory change.

“No rational person could think that everything that was done was good, fair, sensible and effective, or coherent and consistent in creating a safer and stronger system,” Dimon said in the 45-page letter. “Poorly-conceived and uncoordinated regulations have damaged our economy, inhibiting growth and jobs - and this has hurt the average American," he wrote.