President Trump says he plans to roll back Dodd-Frank financial regulations because so many friends of his in business can’t borrow money pic.twitter.com/Ibm9qeRbJK
— Bradd Jaffy (@BraddJaffy) February 3, 2017
If “Dodd-Frank” rings a bell, that’s because the Dodd-Frank Wall Street Reform and Consumer Protection Act co-sponsored by former Rep. Barney Frank and former Sen. Chris Dodd was pushed through Congress in 2009 and signed into law by President Obama in 2010 to reshape Wall Street. Why? Because the 2008 financial crisis had nearly decimated the country’s economy, and most of the damage incurred during the so-called “Great Recession” was caused by lackluster regulation. Dodd-Frank, therefore, was meant to curb certain practices and ensure the markets wouldn’t suffer a similar nosedive.
So of course President Donald Trump will reportedly sign a new executive order on Friday easing, or doing away completely with, certain regulations established by the 2010 law. According to a White House spokesperson who talked to the Washington Post, Trump campaigned against Dodd-Frank throughout the 2016 election and his new executive order will deliver on that promise.
The president seemingly confirmed the news by addressing Dodd-Frank by name:
“We expect to be cutting a lot out of Dodd-Frank,” Trump said during a meeting with business leaders Friday morning. “Because frankly, I have so many people, friends of mine, that had nice businesses, they just can’t borrow money… because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank.”
Progressive Democrats like Elizabeth Warren have rallied in support of Dodd-Frank since its implementation and especially throughout Trump’s campaign. What’s more, the tighter restrictions imposed by the law — which reach far beyond the blocks of Wall Street — continue to help federal investigators take on companies illegally taking advantage of, or outright misleading, consumers. Yet these considerations were apparently never a part of Trump’s consideration, whose chief concerns were his “friends” with “nice businesses.”
And seeing as how Dodd-Frank is a piece of legislation and not another one of Obama’s executive orders, Trump simply cannot sign its effects away. As one expert told the Post, “many of the regulations created by Dodd-Frank would be difficult to eliminate without action from Congress.” However, he added, “there are a number of changes that regulators can make (especially on the enforcement of these rules) which could have a significant impact on the business models of banks and other financial services firms.”