Three Weeks After Trump’s Inauguration, Financial Sector Is Already Seeing MAJOR Deregulation

President Trump and his advisors are working hard to undo the damage that’s been done to the financial sector as a result of the 2008 crisis that gave us Dodd-Frank and, more specifically, the Consumer Financial Protection Bureau (via AP).

The ‘Fiduciary’ Rule has come under fire as well.

Check it out:

Trump has branded the 2010 Dodd-Frank law — which imposed many of the rules — a “disaster.” Financial firms, too, have chafed against it, and Republican lawmakers have longed to dismember it. Now, they see a chance to succeed.

The drive to repeal the rules has come in a multi-pronged attack — from the White House, on Capitol Hill and at the Securities and Exchange Commission.

Trump and the team around him “want to have this dramatic beginning, looking like he’s moving as quickly as he can to fulfill all his campaign promises,” says Norman Ornstein of the American Enterprise Institute, a seasoned observer of Washington politics.

There are four major ways by which finance regulation is going to change.

  1. In general, Dodd-Frank is in for a total overhaul.

    Trump’s push to free banks from many restraints imposed by Dodd-Frank has drawn cheers from Wall Street. They argue that the law imposed overly burdensome restrictions on lending.

  2. Consumer Protection Agency overreach is about to be no more.

    Republicans last week took a first swipe at the Consumer Financial Protection Bureau. The bureau, created by Dodd-Frank, exists to protect ordinary consumers from abusive practices by banks, mortgage companies, credit card issuers, payday lenders, debt collectors and others.

    The CFPB has been a prime target for Republicans, who have long accused it of regulatory overreach. But the bureau’s actions have led to millions in settlements for individual victims.

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  3. ‘Fiduciary’ Rule is put on pause.

    Trump has told the Labor Department to delay implementing a rule requiring brokers who recommend investments for retirement savers to meet the stricter standard that applies to registered advisers: They must act as “fiduciaries” — trustees who are obliged to put their clients’ best interests above all. The delay gives the administration a chance to rethink the rule and to revise or eliminate it.

  4. CEO salary transparency is up for question.

    One of the rules requires public companies to reveal the gap between their chief executives’ annual compensation and the median — or midpoint — pay of their employees. Lavish executive pay is a hot-button issue with the public and in Congress. During the financial crisis, outsize pay packages were blamed for encouraging disastrous risk-taking and short-term gain at big banks at the expense of long-term performance.

    Companies were required to report the pay gaps in their annual reports for their first fiscal year that begins this year.

    Business groups like the U.S. Chamber of Commerce have complained that the rule imposes costly and time-consuming requirements for companies to gather pay information on their employees. They further argue that the mandate may put U.S. companies at a competitive disadvantage relative to foreign companies.

These developments are major victories for the financial sector, who’ve suffered from overregulation for years.


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