Dismantling Dodd-Frank Act Finally Comes as Trump Signs Executive Order

Trump called the regulation a “disaster” recently during a meeting with business leaders.

Bartiromo said the main criticism of the Dodd-Frank law was that it forced “small and mid-cap banks.to hold capital” in the event there was another crash. The rule, named after the former Federal Reserve chairman and longtime regulation advocate Paul Volcker, will likely be “administratively softened in the years ahead”, analysts at Compass Point said in a note today.

The executive order Friday will surely be met with opposition from Democrats and lobbying groups who believe the post-2008 regulatory reforms are protecting consumers from predatory investment brokers, a narrative challenged by Trump’s performance with voters in the Midwest, where homeowners were hit hardest by the housing crisis.

Trump signed an executive order on Friday that sets this deregulation effort in motion.

Some critics of the rule, including White House National Economic Council Director Gary Cohn, have said it would limit consumer choice and force advisers to only offer retirement products with the lowest fees, regardless of whether those products were the best ones for clients.

The president of the nonprofit Wall Street watchdog Better Markets issued a statement blasting Friday’s actions. Elizabeth Warren, D-Massachusetts, who accused the president on being on the side of Wall Street, not the American people.

“I’ve always felt that Dodd-Frank went too far”, said TheStreet’s Jim Cramer from the floor of the New York Stock Exchange.

Opponents of the rule argued it would raise costs and make small accounts unprofitable.

Trump also signed a presidential memorandum instructing the Labor Department to delay an Obama-era rule requiring financial professionals to put their clients’ interests first when giving advice on retirement investments.

The deadline for implementation was supposed to be April. The question, as always when the Trump White House repeals laws or regulations, is what the administration intends to do instead. The Volcker Rule, a controversial mandate that prevents banks from engaging in speculative investing with depositor funds, is also expected to reviewed and possibly changed. The Department of Labor will review the rule established under former President Barack Obama to determine whether it is necessary.

President Donald Trump on Friday signed an executive order Friday that will begin chipping away at the landmark Dodd-Frank Act, a set of financial regulations passed in the aftermath of the Great Recession, according to Bloomberg News. Details of the order were not immediately available, but the action wasn’t expected to make immediate changes to financial regulations. This measure gives the Federal Deposit Insurance Corp. the authority to wind down large financial institutions in lieu of bankruptcy.

Capital requirements. Banks have to have more money on hand to weather another financial crisis.

The Trump administration and many companies, such as General Electric, have hammered this label, because of the additional regulatory burden that comes along with the designation.