President-elect Trump is announcing on his website that he will immediately dismantle the Dodd-Frank financial regulations put into place shortly after the 2008 crash and signed into law by President Obama. With a Republican Congress backing him up, it’s fair to say that he will get his wish.
Banks are hailing the move as a godsend and see it as less oversight and more profit.
If such a move is implemented, its effects will be far-reaching. It will get rid of legislation that has up until now protected consumers from abusive lending and mortgage practices by banks that caused the financial crisis in the first place – and which it sought to prevent from happening again.
In total, there are 16 major areas of oversight reform that the law put into place that will go away.
“Following the financial crisis, Congress enacted the Dodd-Frank Act, a sprawling and complex piece of legislation that has unleashed hundreds of new rules and several new bureaucratic agencies,” reads the statement. “The proponents of Dodd-Frank promised that it would lift our economy. Yet now, six years later, the American people remain stuck in the slowest, weakest, most tepid recovery since the Great Depression.”
It’s no secret that Republicans have been wanting to undo the massive legislation since the very moment it was implemented. They will now get their chance.
The law took years to write and while it will be almost impossible for them to get rid of it entirely in their first 100 days, there are some things they can do to reverse some of its major provisions from the very get go, padding banks profits almost as soon as the new year begins.
Once Republicans get rid of the “Volcker-rule,” banks will once again be able to make speculative investments that led to the industry’s downfall almost a decade ago.
Another major target – the Consumer Financial Protection Bureau, will almost assuredly go away.
They made news just a few months ago in September when they fined Wells Fargo more than $100 million for the widespread illegal practice of secretly opening unauthorized accounts without the permission of account holders. This protection will no longer exist under a Trump administration.
Elizabeth Warren, known for her tough stance on the big banks, vowed to fight Trump and Republicans on this if they attempted to follow through with it.
“If Trump and the Republican Party try to turn loose the big banks and financial institutions so they can once again gamble with our economy and bring it all crashing down, then we will fight them every step of the way,” she said.
Given that Trump just recently added this to his site, it must mean that he is making this a priority in his administration. He has already stated publicly that repealing Obamacare would be one of the first things he does, so it remains to be seen where this will rank on his to-do list.