Donald Trump’s transition team vowed to dismantle the Dodd-Frank law, saying the 2010 financial reform statute “does not work for working people.”
In a statement on GreatAgain.gov, a site launched Thursday to articulate the incoming administration’s plans, President-elect Trump’s team said it “will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.”
The incoming team described Dodd-Frank, President Obama’s legislative response to the 2008 financial crisis, as a “sprawling and complex piece of legislation that has unleashed hundreds of new rules and several new bureaucratic agencies.”
The policy statement didn’t say which agencies the team found particularly bureaucratic. But in an article Wednesday, Crain’s noted that the new administration would likely defang the Consumer Financial Protection Bureau, which came into being when Dodd-Frank was passed and which recently broke the case involving Wells Fargo creating millions of sham customer accounts.
JPMorgan Chase CEO Jamie Dimon, mentioned Thursday as a possible Treasury secretary for Trump and an early critic of the CFPB, praised the agency in 2011. “We need to create a Consumer Financial Protection Bureau that is effective both for consumers and banks,” Dimon wrote. “We fully acknowledge that there were many good reasons that led to the creation of the CFPB.”
As for new rules and regulations, there is no question that Dodd-Frank unleashed many on banks and other financial institutions. According to the law firm Davis Polk & Wardwell, the law created 390 new requirements, of which 70% had been enacted by this past July.
Perhaps the most famous is the Volcker Rule, which put constraints on banks using their own capital to make large bets in the markets. Dodd-Frank also codified which institutions are too big to fail, and thus subject to stricter capital requirements and regulatory scrutiny. Insurance giant MetLife sued after the government deemed it too big to fail.
In a separate statement, Trump’s transition team said the administration would impose a moratorium on all new regulations, while identifying and eliminating those that “kill jobs.” The team noted that the cost of complying with new regulations has risen by $100 billion since 2009, but did not attempt to quantify the benefits of those regulations. Bank stocks have jumped 9% since Election Day.